TIDMDFS
RNS Number : 7356M
DFS Furniture PLC
23 September 2021
23 September 2021
For immediate release
DFS Furniture plc ("DFS" and the "Group")
Preliminary Results
MARKET OUTPERFORMANCE DRIVEN BY OUR SCALE AND INTEGRATED RETAIL
MODEL,
CREATING A SUSTAINABLE BASE FOR FURTHER GROWTH
DFS Furniture plc (the "Group"), the market leading retailer of
living room and upholstered furniture in the United Kingdom, today
announces its preliminary results for the 52 weeks ended 27 June
2021 (prior year comparative period is the 52 weeks ended 28 June
2020, non Covid-19 disrupted comparative period is the unaudited
pro-forma 52 weeks to 30 June 2019(2) ).
GBP'm FY21 FY20 Change Pro-forma Change
FY19(2) (unaudited)
------- ------- ------- --------------------
Revenue 1,067.7 724.5 47.4% 996.2 7.2%
Revenue excluding
Sofa Workshop(3) 1,062.6 710.2 49.6% 968.5 9.7%
Digital % of
revenues excluding
Sofa Workshop 35.3% 18.6% 16.7%pt 17.0% 18.3%pt
Underlying PBT(A)(1) 105.8 (63.1) 168.9 50.2 55.6
PBT 99.2 (81.2) 180.4 43.6 55.6
Basic underlying
EPS(1) 36.0p (24.3)p 60.3p 18.4p 17.6p
Basic EPS 34.5p (31.4)p 65.9p 16.5p 18p
Net bank debt(1) 19.0 157.7 88.8% 165.2 n/a
---------------------- ------- ------- ------- -------------------- -------
Leverage(1) 0.2x n/a n/a 2.0x 1.8x
---------------------- ------- ------- ------- -------------------- -------
(1) Definitions and reconciliations of KPIs including
Alternative Performance Measures ("APMs") are provided at the end
of this statement in Note 12 to the condensed consolidated
financial statements.
(2) As previously published, in 2019 the Group changed its
accounting reference date from 31 July to 30 June. FY19 was
therefore a short accounting period of 48 weeks. In order to
provide full year comparative figures, unaudited pro-forma figures
are presented for the 52 weeks ended 30 June 2019.
(3) Sofa Workshop was disposed of by the Group in September
2020.
Financial summary:
-- Revenue from continuing operations grew by GBP94.1m or 9.7%
compared to the non Covid disrupted pro-forma FY19 period (up 7.2%
on an as reported basis vs. FY19 pro forma), as we leveraged our
scale, operating experience and long-standing relationships to
accelerate our make-to-order deliveries rate.
-- Growth in new orders in the period was significantly stronger
than the revenue growth and was driven by market share gains,
pent-up demand from 'lockdown one', and a shift in consumer
spending to the home, leading to a high closing order bank that
will be recognised through H1 FY22.
-- Resilient trading performance through lockdown periods
benefitting from the strength of our integrated retail proposition,
with online revenues up 184.3% year-on-year.
-- Record underlying profit before tax excluding brand
amortisation(1) achieved of GBP105.8m; GBP99.2m on a reported
basis.
-- Significant reduction in net bank debt(1) to GBP19.0m
(c.GBP89m excluding temporary working capital benefit) from
GBP157.7m at previous financial year end with period end
leverage(1) at 0.2x.
-- Dividend to be reinstated with a proposed final payment of
7.5 pence per share, reflecting the implementation of our published
Capital & Distribution policy.
-- New three year agreement for GBP225m ESG-linked senior
revolving credit facility to December 2023 with two further one
year extension options.
-- Strong consumer demand continues to be experienced over the
first 12 weeks of FY22 with the current order bank at a record
high, providing further resilience.
Operational and strategic highlights
-- Progressed our strategic agenda, responding rapidly to the
fast-changing operating and trading environment.
-- Gained market share through our integrated retail model,
demonstrating the strength of our business model and our ability to
attract customers through digital and physical retail channels at
scale.
-- Delivery of GBP9m of incremental efficiency savings in year
across our property and marketing platforms.
-- Opened five new Sofology Showrooms in FY21 with eight
openings planned in FY22, driving additional upholstery market
share gain through a proven approach.
-- Integration of Dwell into the DFS brand operating structure,
increasing efficiency and creating competitive fulfilment solution
for DFS's extended homeware offer.
-- Launched 15 upholstered bed ranges through our DFS brand,
with positive early results, and strengthened our beds commercial
partnerships, driving the opportunity to gain share in the GBP5bn+
bed and non-upholstery living room market.
-- Significant progress since launch of new ESG strategy in
September 2020, with progress across all target areas and a good
consumer response to our newly launched sustainable ranges
including our partnership with Grand Designs. Formation of
Responsible and Sustainable Business Committee to ensure Board
oversight of ESG strategy.
Current trading
As detailed in our year end trading statement, strong customer
demand in the final quarter of FY21 was already expected to
underpin revenues and profits in the first half of FY22. Order
intake has also remained strong in the current financial year to
date, well ahead of our previous scenario of +7% growth on FY19,
resulting in an order bank that continues to grow and which in
absolute terms is very significantly ahead of normal levels. This
order intake provides significant resilience, and confidence in our
outlook. However the constraining factor on our reported short-term
financial performance will be our pace of conversion of the order
bank, which depends on both our supplier partner manufacturing
capacity and also the capacity of our proprietary logistics
operations. We believe the Group is well placed to achieve the
medium scenario of our range of FY22 profit outcomes identified
back in June.
We already have increased output capacity significantly in FY21.
We continue to strengthen our operations, increasing warehouse
capacity and resourcing levels, to meet customer demand.
Notwithstanding this, it should be recognised that the short-term
operational environment continues to be exceptionally uncertain and
difficult, given well-reported logistics disruption, cost inflation
pressures and unplanned Covid absences. We believe that we have the
right plans in place to mitigate these impacts, underpinned by our
scale, operating experience and long-standing relationships, and we
are focused on delivering good customer service, protecting our
colleagues and creating long-term value.
Tim Stacey, Group Chief Executive Officer said:
"Our record profits delivery in the last financial year is a
fitting tribute to all the hard work of our colleagues and
testament to the resilience and flexibility of our integrated
business model. Despite numerous operational challenges during the
pandemic, I'm proud that we have remained focused on our strategic
agenda to lead sofa retailing in the digital age and are on track
to achieve the incremental GBP40m of profit benefits set out in
2018. We also see further growth opportunities into the medium term
derived from extending the reach of our retail brands and
optimising our operating platforms.
As we enter a new financial year, the Group is very well
positioned to build on its market leadership position in sofa
retailing and to target further growth as we invest to strengthen
our business platforms and extend our retail proposition into
adjacent product categories."
Enquiries:
DFS (enquiries via Tulchan)
Tim Stacey (CEO)
Mike Schmidt (CFO)
Phil Hutchinson (Investor Relations)
Tulchan
James Macey-White
Jessica Reid
+44 (0)20 7353 4200
dfs@tulchangroup.com
Analysts presentation
DFS will be hosting a virtual results analyst presentation at
9.00am today. A live webcast and the presentation slides will be
available on the Group's website: www.dfscorporate.co.uk.
About DFS Furniture plc
The Group is the clear market-leading retailer of living room
furniture in the United Kingdom. Our Group purpose is to bring
great design and comfort into every living room, in an affordable,
responsible and sustainable manner. We operate an integrated
physical and digital retail network of living room furniture
showrooms and web sites in the United Kingdom, Republic of Ireland,
Netherlands and Spain, trading through our leading brands: DFS,
Sofology and Dwell. We attract customers through our targeted and
national marketing activities and our reputation for high quality
products and service, breadth of product offer and favourable
consumer financing options. We fulfil orders for our exclusive
product ranges through our own three UK finished goods factories,
and through manufacturing partners located in the UK, Europe and
Far East, and deliver them with care through our expert final-mile
delivery service "The Sofa Delivery Company".
CHAIR'S STATEMENT
Overview
The year to 27 June 2021 is the second year affected by the
far-reaching consequences of the Covid-19 pandemic. In facing the
multi-faceted challenges this has thrown up, our 5,000 colleagues
have demonstrated high levels of resilience, tenacity, and loyalty
in maintaining the momentum of recovery. Learning from the
experience of the first UK lockdown and taking an agile approach in
the face of ever changing lockdown restrictions and international
supply chain disruption, the Group kept its manufacturing and
supply chain operational and safe throughout the year. Online sales
increased year-on-year by 184% benefiting from the investments in
technology to improve the online experience for our customers, and
our showroom colleagues provided additional support to customers
wishing to purchase over the telephone.
From the outset of the pandemic a priority has been to look
after our people. During the year I am pleased to say that despite
many of our showrooms being closed for up to 21 weeks of the year
the Group did not furlough any colleagues, and instead introduced a
'Coronavirus Absence Pay Scheme'. The aim of the scheme, which paid
colleagues 80% of their pay, was to ensure that our colleagues had
the peace of mind that they would be supported if they were absent
from work because they were ill with the virus or could not attend
work for other Covid-related reasons.
Strategic Progress
We have continued to progress the implementation of the Group's
strategy and refine its priorities in response to changing market
conditions and opportunities. This has included aspiring to ESG
leadership in our sector and planning improvements to the
effectiveness and scalability of our UK manufacturing.
A number of initiatives have been launched to develop the
product ranges and the integrated retail proposition of our two
larger brands, and we have achieved an increase of c.2%pts in the
Group's market share.
Sofology, which targets a different customer demographic to DFS,
is continuing to perform well. The brand is now gaining national
coverage after opening five showrooms in the year and with a strong
pipeline in place is in a good position to take advantage of the
growth in the home furnishings market.
Progress has also been made with the creation of our new Group
final mile logistics operation; The Sofa Delivery Company which
will significantly improve the UK logistics capability for both our
brands. Over a thousand of our colleagues within DFS and Sofology
joined the new business, with the aim of improving the customer
experience and reducing both our operating costs and our carbon
footprint.
Financial Results
Showrooms were closed for a significant portion of the year, but
the periods when they were open saw exceptional levels of demand
and similarly our online channels had a busy year. This has enabled
suppliers and internal manufacturing operations to operate at high
production levels and for the business to deliver an elevated
volume of orders to our customers. Consequently, the Group has
achieved a record level of revenue and profits. Total group revenue
exceeded GBP1billion for the first time, generating underlying
profit before tax and brand amortisation(1) of GBP105.8m. Reported
profit before tax was GBP99.2m, giving rise to earnings per share
of 34.5 pence.
Looking forward, the Group has started the year with strong
trading momentum, supported by a higher-than-normal order bank
entering the current financial year and a continued enthusiasm
amongst customers for enhancing the comfort of their homes. This
means the Group now holds relatively higher levels of visibility on
customer demand for FY22 and alters the principal driver of our
overall financial performance in the new financial year to
maximising our supply chain throughput, and mitigating any
operating and raw material cost inflation or other Covid disruption
experienced.
The operating conditions in the new financial year are currently
demanding and whilst the high levels of demand are welcome, they do
present substantial operational challenges for our supply chain and
manufacturing teams to overcome. Further, despite the roll out of
the UK vaccination programme we may still have to change our ways
of working to adapt to the continued impact of Covid-19. I am
however confident that, given the way in which the Group has
addressed all of the challenges of the last year, we are positioned
to respond, with well-established leadership and appropriate
structures in place to manage these risks.
Our purpose, our values, and our people
The Group, the outright market leader in its sector in the UK,
has a distinctive culture. There is a great sense of pride,
loyalty, and commitment from our colleagues across the Group. Our
purpose, built on our values of "Think Customer, Be Real and Aim
High", is to bring great design and comfort into every living room,
in an affordable, responsible, and sustainable manner. That our
people live our values has been evident from their continued
dedication and enthusiasm over the past year as they have worked
hard to support our customers and each other through the challenges
brought by the pandemic.
We are aware that the pandemic has had a serious impact on
people's health and wellbeing. Over the year the Group has invested
in resources to support our colleagues through the pandemic. This
includes a new sick-pay scheme, increasing the number of mental
health first aiders and working with partners to launch digital
tools to help us understand how our colleagues are feeling and to
help them try to deal with any health issues.
Environmental, Social and Governance ("ESG")
Over the last year the Group has made good progress against our
initial ESG targets. Our strategy is to leverage our influence and
scale as market leader to offer sustainable and ethical products,
to drive a more circular product lifecycle and to act in a
responsible manner with our customers, suppliers, and wider
stakeholders.
Significant effort has been made in improving the traceability
of the raw materials used in our products and obtaining third party
certification and verification that our suppliers meet our
sustainable sourcing requirements. This has initially focussed on
timber and leather, and we have now published new targets covering
the fabrics we use. Both Sofology and DFS have introduced
sustainable sofas during the year. For example, the DFS 'Grand
Designs' range uses fabric made from recycled polyester yarns, with
sustainably sourced timber and sustainable sofa cushions made using
50% recycled plastic from Plastic Bank, globally recognised as one
of the leading solutions to reduce ocean plastic.
The Group has also committed to the BRC Climate Action Roadmap
to be net zero by 2040 and we are in the process of securing a
specialist advisor to help us understand our Scope 3 emissions and
establish Science-Based targets to allow us to achieve our net zero
ambitions.
During the year the Group's Leadership Team has developed our
Inclusivity and Diversity strategy. The mission is to make DFS a
place where "Everyone is Welcome" and whose ethnic make-up reflects
the society in which we operate our business.
We believe this approach to sustainability and to responsible
business is expected by our colleagues, our customers and our wider
stakeholders and indeed embedding sustainability into everything we
do is a key priority for the future. To support our progress and
ensure that continuing appropriate focus is given, the Board has
now decided to establish a Responsible and Sustainable Business
Committee to directly address these topics, with the Committee's
terms of reference available on our corporate website.
The Board
In late June 2021 we welcomed Loraine Martins to the Board as a
Non-Executive Director. Loraine is already fully engaged within the
business and brings a wealth of experience in inclusivity,
diversity and health and safety to the Group.
Dividend
Last year the Board took the decision not to recommend the
payment of a dividend in order to support the Group's financial
resilience. We do however recognise that dividends are an important
element of the investment case for our shareholders, as stated in
our Capital and Distribution policy, and we have the intention of
steadily growing our dividends over time in line with our cash
generation and prospects, while prioritising the Group's long-term
financial health. As set out in greater detail in the CFO's report,
this year, as a result of our strong financial performance I am
pleased to confirm we will be recommending a final FY21 dividend of
7.5p per share.
Looking ahead
As the UK's leading upholstery retailer and manufacturer, the
Board is confident that our expertise in designing new and
innovative products, our brand heritage, vertical integration, and
financial strength, places the Group in a relatively strong
position over the long term. We remain committed to developing the
Group to deliver on the expectation of our customers, drive
shareholder returns, have a positive impact on society and to
provide an inclusive and rewarding place for our colleagues to
work.
Ian Durant
Chair of the Board
23 September 2021
CHIEF EXECUTIVE'S OPERATING REVIEW
Overview
I am pleased to report a strong recovery in FY21 following a
challenging FY20 which was impacted by the early stages of the
Covid-19 pandemic. The Group delivered record sales and profit and
further extended our market leadership. This performance reflects
the benefit of our own historical investments in our online
capability, showroom estate and business platforms, a favourable
environment for consumer spending on homeware products as well as
pent-up demand at the start of the financial year.
Delivering this growth would not have been possible without our
loyal colleagues and they all deserve a huge thank you for their
commitment and resilience during the year, as well as their
unwavering application of our Group core values 'Think Customer',
'Be Real' and 'Aim High', as we have sought to meet unprecedented
customer demand.
I would like to thank all our customers for their continued
loyalty and patience in relation to extended lead times as we dealt
with exceptional levels of demand and faced disruption to our
supply chains. Reflecting shareholders' support during the peak of
the pandemic in the spring of 2020, I am also pleased that we are
able to repay their commitment to the Group with a year of strong
profits, a positive outlook, a strengthened balance sheet and a
return to dividend payments.
While furniture and homewares markets have grown strongly, our
market share also continues to grow, at least in line with the 2%+
rate that we experienced in the first half of FY21, based on our
own proprietary data developed with Barclaycard. I believe that
these gains are due to the fundamental attractions of our Group,
which I set out in our interim results: the Group's market
leadership position, which drives multiple economies of scale; our
'channel agnostic' integrated retail model, which allows us to meet
fast changing customer shopping habits; and our sustainable
business approach, both in terms of our impact on the environment
and preserving our long-term success as a Group. With these strong
foundations in place, we believe our strong operating performance
will continue and we are set to grow further into the medium
term.
Financial results
Revenue rose 47.4% on the previous year, or 49.6% on a
comparable basis (excluding Sofa Workshop, which was sold in
September 2020), however our FY20 revenues and profits were
severely impacted by the pause in deliveries for the majority of
the final quarter to comply with Covid-19 restrictions. A more
representative, pre-pandemic comparator period is therefore the
pro-forma 52 week period ended 30 June 2019(1) ("Pro-forma FY19").
Against this period, FY21 revenue increased by 7.2% (+9.7%
excluding Sofa Workshop). This performance reflects market share
gains as well as the ongoing benefit of a shift in consumer
spending to home-related categories.
Underlying profit before tax and brand amortisation(1) rose to
GBP105.8m compared to a loss of GBP63.1m in FY20 and an IAS17
profit of GBP50.2m in the pre-pandemic Pro-forma FY19. Reported
profit before tax was GBP99.2m compared to a loss of GBP81.2m in
FY20. Driven by strong trading alongside a favourable movement in
working capital, net bank debt(1) reduced by GBP138.7m in the
period to GBP19.0m. Adjusting for the working capital position,
which we expect to unwind, our year end leverage ended the year
within our targeted 0.5-1.0x range. Reflecting our robust
underlying cash generation, significantly reduced financial
leverage and our positive start to FY22, we recommend a final
dividend of 7.5p per share.
As detailed in our June pre-close statement, the Group
recognises revenue at the point of delivery to customers and
therefore the strong order intake seen in the final quarter of FY21
will benefit revenues and profits in FY22. We address current year
prospects in more detail in the Financial Review.
Operational Update
One of our fundamental advantages is our increasingly integrated
sales model. Our integrated retail ambition puts the customer at
the centre of our business and aims to deliver a customer journey
that is consistent across all our sales channels. The strength of
our digital infrastructure and the Group's integrated approach
proved invaluable as we have adapted to the rapidly-changing retail
environment. Our digital platforms allowed us to rapidly redeploy
showroom colleagues into online sales and customer service roles
during those periods when our showrooms were closed.
Due to restrictions around showroom openings in the year, the
strength of our online sales was a clear highlight of our
integrated approach, and a key point of differentiation versus our
specialist competitors. Gross sales(1) via our online channel
increased by 184% compared with a year earlier and in lockdown
periods our market share gains were particularly elevated.
Our strong profit delivery was achieved despite a number of
operational challenges in the year, principally disruption due to
the Covid-19 pandemic and external supply chain factors. Our
management of Covid-19 benefited from our learnings in the previous
financial year, as we were once again required to close and reopen
showrooms at different times according to national restrictions,
often at short notice. The safety and wellbeing of our customers
and colleagues remained our priority throughout. Colleagues have
been regularly reminded to adhere to our health and safety "Golden
Rules", which remained in place throughout the financial year.
Performance throughout the year was particularly affected by
shipping disruption from the Far East and raw materials supply
issues relating primarily to foam availability in Europe. We have
also faced internal and external manufacturing capacity and
delivery constraints and cost inflation due to high levels of
demand for our products.
As we stated in our interim results, in relation to Brexit,
limited disruption has been experienced to date and we continue to
believe that the Group is well placed in its key markets following
the UK's departure from the EU.
Review of Strategic Progress
The aim of our strategy is to lead sofa retailing in the digital
age. The strategy is centred on three interrelated pillars (Drive
DFS Core, Build The Platforms and Unlock New Growth) across which
we identified initiatives to drive GBP40m of incremental pre-tax
profit as originally set out in 2018.
We are pleased with our strategic progress, particularly in
relation to the strength of our digital infrastructure during the
pandemic and the growth and integration of the Sofology
acquisition. While our FY21 PBT and current FY22 PBT guidance
indicates that we are well down the road in relation to our
original profit targets, we still see significant growth potential
across the Group. We provide a progress update on the individual
pillars below.
Drive The Core
The DFS brand is the largest and most profitable in the Group,
accounting for c.80% of Group revenue and brand contribution(1) in
the last financial year. The key priority of this strategic pillar
is to drive the growth of the DFS brand across all our channels.
Key initiatives in the year centred on delivering further
enhancements to our seamless customer journey, developing new
innovative products and making improvements to our showroom estate
and customer service provision.
Our integrated retail investment programme encompasses a range
of initiatives including: continuous enhancements to our website
with a focus on imagery, page load speeds and checkout; further
investment in text chat to deliver an improved customer experience;
shared baskets in place to support the customer journey across
website and showrooms; improvements to our resourcing and reward
models, driving greater efficiency and conversion; and the
development of a consistent approach to refreshing our showroom
format. Reflecting the strength of our websites, we have begun to
focus our efforts on pursuing a range of opportunities to grow our
total addressable market by targeting incremental product sales
from items, such as beds and homewares, that we are not able to
range extensively in our showrooms.
Attractive, exclusive products are a key point of
differentiation versus our competitors and we continually refine
our use of data and insights to improve our customer targeting,
range management and new product development. This allows us to
maximise the customer appeal of our product portfolio, ensure there
are no gaps in the key style groups, promptly replace any
underperformers and increasingly embed sustainability in our
ranges.
A product launch highlight in the first half of the financial
year was our aspirational 'Halo Luxe' luxury leather range with its
own product-led TV advertising campaign. In the second half we
introduced our new partnership with 'Grand Designs' for a new range
of sofas combining design integrity and a sustainability ethos.
We've also expanded our bed offer, featuring exclusive ranges from
our brand partners Joules and French Connection, as we target
incremental growth from this sizeable market opportunity. Finally,
reflecting DFS's status as Team GB's official Olympics homeware
partner, we launched the new limited edition Yuttari range to both
honour and help provide relaxation for our elite Team GB athletes
on their journey to Tokyo.
We're constantly seeking to improve our customer proposition and
develop new innovative services to engage customers. Consistent
surges in demand as we reopened our showrooms following various
national government lockdowns highlight just how much customers
appreciate our well-invested showrooms. We believe the combination
of digital and physical is the right long-term approach to address
consumers within the sofa market.
We continued to invest in showrooms in the year, scheduling
works during lockdowns where possible to minimise disruption on
trading. We are undertaking a programme to update our showrooms,
which includes space optimisation of Dwell and former Sofa Workshop
space, relocation of the administrative area, and an improved
layout for customers. These changes typically result in a
significant increase in upholstery bays boosting productivity. In
FY21 we completed 16 refurbishments and plan an additional 16 in
the current year. Our online appointment booking service remains
popular with customers and we continue to evaluate our live 'video
in store' proposition.
Customer service helps drive our brand reputation and therefore
remains a key area of focus, particularly given the twin challenges
of the pandemic and supply chain disruption. I highly value our
customer service, delivery and repair teams who continue to work
incredibly hard on behalf of our customers. We track customer
satisfaction by monitoring Net Promoter Scores (NPS) at various
stages of the customer journey. Our post purchase NPS score for the
DFS brand remains around its all-time high at 86.4% (FY20 85.7%).
In contrast, our established customer satisfaction score declined
year-on-year to 30.7% (FY20 42.9%), reflecting the volatile supply
chain environment. Based on a survey sent to customers four months
after delivery, this June figure captures those customers most
impacted by delivery delays caused by disruption to shipping as a
result of Covid-19 and raw material supply. We are working very
hard to mitigate these factors outside our control and are in the
process of centralising our customer service activities to deliver
improved service levels from a more efficient and flexible
Group-wide platform.
While we've achieved significant progress in the year, we are
only two years into our strategy and seeing no shortage of
opportunities to extend the market leadership of our core DFS
brand.
Build The Platforms
This strategic pillar focuses on Group-wide benefits from
utilising existing infrastructure and scaling systems, processes
and data. As a market-leading, vertically-integrated business, we
are targeting significant efficiency gains from our property,
logistics, marketing and manufacturing activities. In recent
results presentations we've highlighted the attractive
characteristics of platform-led retailers, which include greater
commercial, operational and technical resilience, delivery of
valuable customer data and insights and increased scale and
reach.
In FY21 our focus was on achieving ongoing cost savings and
efficiency targets across our showroom property estate, driving a
range of marketing efficiency improvements, and continuing our
plans to develop the best two-man sofa delivery company in the
UK.
We continue to make good progress securing property savings,
through a combination of rent reductions on leases approaching
renewal and downsizing some showrooms. Last year we secured a
further GBP1.3m of annualised savings, bringing the total
annualised saving since the program began to GBP5.6m. We are
confident of achieving the GBP6-8m targeted annual savings by FY23
as previously communicated. We expect to achieve further savings in
the medium term as leases expire beyond FY23.
Turning to logistics, we have delivered another year of progress
in our objective of building a leading Group-wide logistics
platform, The Sofa Delivery Company. Our aim is to improve
efficiency, including improved customer service and a more flexible
working environment for colleagues whilst also reducing the Group's
environmental impact. Our development plans are on track as we
target annualised savings of at least GBP3m from the end of the
current financial year. We are currently integrating our logistics
IT systems across the Group, a key enabler for multi-brand order
fulfilment, and will complete the roll-out of our delivery vehicle
routing and inventory management systems across all vehicles in the
re-branded fleet by the end of FY22.
Following the completion of our colleague consultation process
and the creation of an independent logistics subsidiary, the Sofa
Delivery Company is now able to offer Group-wide extended hours
delivery to customers seven days a week, increasingly important
given customers' busy lifestyles.
Our ongoing marketing transformation programme continues to move
ahead at pace. Alongside our focus on data and insights to drive
our omnichannel marketing investment, we have recently reviewed our
DFS retail brand activities which has resulted in the appointment
of a new communications agency, to help support and drive the next
phase in our DFS retail brand marketing. Additionally, we are
currently reviewing our marketing production and automation
capabilities in an effort to secure further efficiencies across our
key customer communications channels. Finally, we are leveraging
our marketing capabilities across the group, enabling our Sofology
marketing colleagues to adopt and adapt our Group econometric
modelling platform to help inform their marketing and channel mix
investment strategy.
Unlock New Growth
Our third strategic pillar is to 'Unlock New Growth' from
commercial initiatives beyond our core DFS brand. Our main priority
in the last financial year has been to accelerate the roll-out of
the Sofology showroom estate to support its development into a
leading nationwide sofa retail brand. This pillar also covers
growth opportunities derived from our Dwell homewares brand and our
overseas showrooms in Spain and the Netherlands.
Sofology
We are making good progress in our plans to develop our Sofology
brand into a nationwide business. Despite headwinds of shipping
delays and foam disruption, Sofology delivered sales and brand
contribution(1) growth of c.4% and 20% respectively compared with
the pro-forma FY19 pre-pandemic year.
Following a pause in planned openings in FY20 as we assessed the
impact of the pandemic on the property market, we opened five
showrooms in FY21, with new outlets in Hove, Stockport, Swindon,
Cambridge and Maidstone, to give a total of 50 UK showrooms. In the
current year we anticipate opening a further eight showrooms.
Sofology has a reputation for fun, style and sustainability, and
we're committed to retaining the brand's aspirational appeal in a
Group context. Following on from our successful Owen Wilson
campaign, Sofology's latest advertising sees Helena Bonham Carter
encouraging customers to 'bring imagination to life' in the way
they make their homes.
New product launches in the year included the Pioneer 'eco' sofa
in the first half, featuring zero foam, 100% recyclable springs,
sustainably sourced timber, fabric made from recycled yarns plus a
20-year guarantee. Just before the year end, Sofology introduced
'Loop', a flexible, sustainable upholstery rental service, whereby
customers can select a stylish, fully recyclable sofa on a 6-18
month rental plan with options to renew as required. At the end of
the customer agreement, each part of the sofa can be repurposed or
recycled, ensuring nothing goes to landfill. We have also recently
introduced three exclusive sofa ranges from the Paloma Faith Home
range, including the aptly named Rock N Roll model.
We continue to see the opportunity to grow the Sofology brand to
65-70 outlets in the medium term, targeting revenue of c.GBP300m at
a pre-tax profit margin of 5-7%.
Dwell and International
As detailed in last year's results, we restructured Dwell's
operations to enable its wide range of attractive products to be
sold more seamlessly to DFS customers, as well as online. Dwell's
integration into the DFS brand operating structure resulted in the
elimination of the operating losses incurred in the previous year
and a more efficient real estate footprint as we integrated Dwell's
offer into the DFS showrooms and progressed the closure of Dwell's
remaining standalone retail outlets. Dwell's sourcing expertise and
supplier relationships are also contributing to the development of
DFS's extended homeware offer.
With a total addressable market of c.GBP5bn, we see the beds and
non-upholstery living room market as a particularly attractive
growth opportunity for the Group. We are able to leverage many of
the Group's assets, including manufacturing capability for
upholstered furniture, web and logistics platforms, marketing
expertise and brand partnerships to develop a truly compelling
bedroom offering. Sales of beds through our online channels were
particularly strong in the year and we continue to develop our
showroom proposition in selected key locations.
We continue to review our growth options for our international
business, which includes six showrooms in the Netherlands and two
in Spain.
Investor Event
Reflecting upon the operational volumes currently in the
business and our focus on looking after our customers and
colleagues to drive long-term value creation, the Group has decided
to defer the investor event planned for November 2021 until Spring
2022. This event will provide investors with a detailed update on
the development of our various platforms alongside an opportunity
to view the latest evolution of our DFS and Sofology growth
strategies. We also look forward to providing more details on our
manufacturing investment, as well as our plans to grow our sales of
living room furniture and beds.
ESG
We remain guided by our Group purpose, which is to bring great
design and comfort into every living room, in an affordable,
responsible and sustainable manner. FY21 has been a year of
progress on a range of fronts for our key stakeholders, as detailed
below.
Whilst the achievement of our record financial results is
undoubtedly a highlight, this performance would not have been
possible without the strength, resilience and spirit of our people.
The Group has a unique culture underpinned by our core 'family'
values of 'Think Customer', 'Aim High' and 'Be Real'. Rising to
challenges at work and at home, our colleagues have enabled the
Group to emerge from the pandemic much stronger than when we
entered. On behalf of the management team and the Board, I would
like to thank all our colleagues for their sterling efforts in the
year.
We launched our ESG strategy in September 2020, with a strong
focus on the Environment based on our "sofa cycle" approach and
have made solid progress against our Phase 1 targets in the last 12
months. One of the highlights of the financial year was our first
ESG Supplier Conference in March, which is available on our Group
corporate website. As well as featuring contributions from 'thought
leaders' such as CDP Co-Founder and environmental expert James
Cameron, the conference set out our intent to work with our
suppliers to innovate and develop new ways of making our products
and our business even more sustainable and transparent. In June
2021, the Group undertook a formal materiality assessment,
supported by a third party expert, in order to identify and
prioritise all of the Group's sustainability risks and
opportunities.
Given ESG is a rapidly advancing subject, with increasing Board
time dedicated to it, the Group has established a new Responsible
and Sustainable Business Board Sub-Committee, which will meet at
least three times per year. Responsibility Champions have been
appointed at all levels of the business, ESG Working Groups
established for each brand and external expert partners are in
place to support us. We have recently introduced our Phase 2 ESG
targets, which include an increased focus on Social criteria and
incorporate our work on diversity and inclusion.
Environmental
Sustainability is a key element of our business model, and
having launched our ESG Strategy in September 2020, we've come a
long way in a short amount of time and are excited about the
opportunities ahead. With the Group's 'Sofa Cycle' based on the
circular economy concept, sustainability is increasingly embedded
across the Group.
A key focus in FY21 was on our finished products and the
resources used in manufacturing them. We have driven positive
change, particularly in relation to the sustainable sourcing of
some key materials in our sofas. Phase 2 targets expand our focus
to cover textiles and material certifications.
Social
The wellbeing of our colleagues has remained a top priority
during the last financial year. We continued to follow various
government rules and regulations in our various markets during the
period and regularly reminded our employees to observe our five
Covid-19 'Golden Rules' to keep colleagues and customers safe. As
we anticipate a hopeful return to more 'normal' lives, we've been
surveying all our employees on their ideal working conditions as
well as providing extensive wellbeing support. During the summer
we've also been refurbishing our Group Support Centre and Sofology
head office in preparation for a more flexible hybrid working
approach.
Our 'Be Real' core value is about accepting each other for who
we are and respecting each other as part of one big family.
Embracing diversity and inclusion is therefore a key focus for the
Group. We've been listening, learning and educating ourselves about
different races, genders, abilities, sexual orientations, religions
and nationalities, with the aim of being a Group where "everyone is
welcome". For example, in the second half of FY21 we celebrated the
range of international languages spoken across the Group,
International Women's Day and Pride month. With our 'Everyone
Welcome' ambition in focus, I'd like to issue a warm welcome to our
newly appointed Non-Executive Director, Loraine Martins OBE, FRSA.
Loraine brings tremendous experience of supporting employers to
develop equality, diversity and inclusion in the workplace.
Governance
The Group continues to be rated highly by external assessors for
the strength of its governance, maintaining a robust corporate
governance framework, practices and policies to manage and deliver
long-term success for the Company, including (but not limited to)
Board composition, Audit Committee structure, executive
compensation and whistleblowing.
Current Trading
As detailed in our year end trading statement, strong customer
demand in the final quarter of FY21 was already expected to
underpin revenues and profits in the first half of FY22. Order
intake has also remained strong in the current financial year to
date, well ahead of our previous scenario of +7% growth on FY19,
resulting in an order bank that continues to grow and which in
absolute terms is very significantly ahead of normal levels. This
order intake provides significant resilience, and confidence in our
outlook. However the constraining factor on our reported short-term
financial performance will be our pace of conversion of the order
bank which depends on both our supplier partner manufacturing
capacity and also the capacity of our proprietary logistics
operations. We believe the Group is well placed to achieve the
medium scenario of our range of FY22 profit outcomes identified
back in June.
We already have increased output capacity significantly in FY21.
We continue to strengthen our operations, increasing warehouse
capacity and resourcing levels, to meet customer demand.
Notwithstanding this, it should be recognised that the short-term
operational environment continues to be exceptionally uncertain and
difficult, given well-reported logistics disruption, cost inflation
pressures and unplanned Covid-19 absences. We believe that we have
the right plans in place to mitigate these impacts, underpinned by
our scale, operating experience and long-standing relationships and
we are focused on delivering good customer service, protecting our
colleagues and creating long-term value.
Conclusion and Outlook
Our record profits delivery in the last financial year is a
fitting tribute to all the hard work of our colleagues and
testament to the resilience and flexibility of our integrated
business model. Despite numerous operational challenges during the
pandemic, I'm proud that we have remained focused on our strategic
agenda to lead sofa retailing in the digital age and are on track
to achieve the incremental GBP40m of profit benefits set out in
2018. We also see further growth opportunities into the medium term
derived from extending the reach of our retail brands and
optimising our operating platforms.
As we enter a new financial year, the Group is very well
positioned to build on its market leadership position in sofa
retailing and to target further growth as we invest to strengthen
our business platforms and extend our retail proposition into
adjacent product categories.
We emerge from the pandemic stronger than ever. This strength is
underpinned by our fantastic teams who have worked with dedication,
care and enthusiasm despite the many and varied challenges we have
faced. I want to personally thank every single colleague for their
unwavering support and look forward with huge optimism, fuelled by
the position the business is now in and most importantly the
spirit, commitment and loyalty of our people.
Tim Stacey
Group Chief Executive Officer
23 September 2021
FINANCIAL REVIEW
Overview
The Group has achieved record levels of revenues, profit and
cash flow in FY21 which has significantly strengthened our
financial position across the course of the year. With market share
gains made through the year, a high opening order bank, strong
demand experienced to date in FY22 and good strategic progress we
have a positive outlook, despite the potentially challenging and
changeable, Covid-impacted operating environment.
The strong financial performance in the FY21 year was driven by
a number of factors:
Firstly, we started the year with a high order book that enabled
us to manufacture and deliver orders at a relatively high and
consistent level to our customers through the summer and autumn.
The size of the order book has also strengthened our cash position,
with customers typically placing a cash deposit with us at the time
of order.
Secondly, there were elevated levels of consumer demand
throughout the year driven by market share gains and a sustained
increase in consumer interest in spending in home categories,
reflecting both growth in remote working and also reduced leisure
and travel spend. Our investment in our integrated retail model
positioned us well to capture this demand during lockdown periods
as well as when restrictions eased.
Thirdly, as our various sales channels utilise the same
fulfilment operations we were able to keep our internal
manufacturing, external finished goods suppliers and our final mile
logistics operations working efficiently through the majority of
the year. This enabled us to maintain elevated levels of customer
deliveries whilst keeping our cost base well controlled.
While we incurred additional costs given the disruption of up to
21 weeks of showroom closures in the year, increased colleague
sickness levels and the introduction of self-isolation and
operating costs to support necessary changes to working and retail
environments, these costs were offset through the suspension of UK
retail business rates. Given the growth in profits due to our
trading performance we therefore chose not to draw upon either the
Coronavirus Job Retention Scheme or other Covid support grants in
FY21 (prior year details are presented in note 3 to the financial
statements).
Our revenue growth in FY21 was however constrained by
sector-wide pressures on supply chains from raw materials
availability, container shipping delays (including the effects of
disruption in the Suez Canal) and Covid-19 disruption of factory
production, particularly in the final quarter of the year.
Consequently, the high demand experienced in the second half and in
the new financial year to date has resulted in an order bank at the
end of the year even greater than the elevated order bank that we
started with, providing resilience for FY22.
Our made to order model has enabled us to deliver revenue growth
without investing in stock and our negative working capital model
and strong profitability has enabled us to significantly de-lever.
Having fully repaid the HMRC VAT liabilities that were deferred
from the previous financial year, net bank debt (1) reduced by
GBP138.7m over the year to GBP19.0m and our reported leverage (1)
was 0.2x. This position does reflect a transitory working capital
benefit of c.GBP70m which will reverse over time as the order book
normalises (and related customer deposits held reduce) and landlord
payments agreed to be deferred from FY20 are fully repaid.
In December 2020 we entered into a new three-year agreement,
with two one year extension options for a GBP225m senior revolving
credit facility with our existing syndicate of seven banks all
continuing their involvement, but at different proportional levels
of participation. In order to align our financing with our ESG
sustainability ambitions we agreed to have the option to link the
interest rate to the achievement of sustainability related targets.
I'm pleased to confirm that we have now implemented this with
targets covering sustainable sourcing practices for wood and
leather, greenhouse gas emissions and diversity in our
workforce.
Given our current financial position, confidence in our enhanced
market leading position and anticipated future cash generation the
Board are recommending to shareholders that dividends are restarted
with a final FY21 dividend of 7.5p per share.
In what has obviously been challenging conditions for our teams
to work in given the pandemic, compounded by unprecedented levels
of demand to fulfil throughout our operations I'd like to take this
opportunity to thank our colleagues for their effort and
perseverance in helping us achieve this record financial
performance.
Basis of preparation
Following the reorganisation of our Dwell business over the
summer 2020 period we have this year presented the Dwell and DFS
brand segments as one segment to reflect how these brands are now
managed.
As communicated in our FY20 annual report, we sold the Sofa
Workshop business in September 2020. In order to aid comparison of
continuing operating segments, the table below includes a subtotal
excluding Sofa Workshop.
Brand contribution(1) , which is reported before property or
administrative expenses, remains our preferred measure of segment
profitability.
As FY20 was significantly impacted by Covid-19 related
government guidance preventing us from delivering orders (and
therefore recognising revenue) we have also included unaudited
pro-forma results for the 52 weeks ended 30 June 2019 ("pro-forma
FY19)* below to provide additional comparison with a non
Covid-disrupted trading period. The year-on-year commentary
covering gross sales, revenue, gross margin and brand contribution
that follows focuses on comparing the results for this financial
year to the pro-forma FY19 period.
(1) Definitions and reconciliations of KPIs including
Alternative Performance Measures ("APMs") are provided at the end
of this statement in Note 12 to the condensed consolidated
financial statements.
*As previously published, in 2019 the Group changed its
accounting reference date from 31 July to 30 June. FY19 was
therefore a short accounting period of 48 weeks. In order to
provide full year comparative figures, unaudited pro-forma figures
are presented for the 52 weeks ended 30 June 2019. Refer to note 12
for further details on alternative performance measures.
Audited 52 weeks ended 27 June 2021 - IFRS 16
DFS Sofology Subtotal Sofa Total Non underlying Total
Workshop before items
non underlying
items
Gross sales(1) 1,093.2 269.2 1,362.4 6.3 1,368.7 - 1,368.7
========================= ======= ======== ======== ========= =============== ============== =======
Revenue 848.0 214.6 1,062.6 5.1 1,067.7 - 1,067.7
Cost of Sales (363.4) (101.8) (465.2) (1.3) (466.5) - (466.5)
------------------------- ------- -------- -------- --------- --------------- -------------- -------
Gross Profit 484.6 112.8 597.4 3.8 601.2 - 601.2
Selling & Distribution
costs (244.4) (55.6) (300.0) (0.5) (300.5) - (300.5)
------------------------- ------- -------- -------- --------- --------------- -------------- -------
Brand Contribution(1) 240.2 57.2 297.4 3.3 300.7 - 300.7
Property Costs (2.9) - (2.9)
Administrative Expenses (75.2) (2.1) (77.3)
------------------------- ------- -------- -------- --------- --------------- -------------- -------
EBITDA(1) 222.6 (2.1) 220.5
Depreciation, amortisation and impairments
excl brand amortisation (83.9) - (83.9)
----------------------------------------------------------------- --------------- -------------- -------
Operating Profit 138.7 (2.1) 136.6
Interest (32.9) (3.1) (36.0)
------------------------- ------- -------- -------- --------- --------------- -------------- -------
PBT pre brand amortisation(1) 105.8 (5.2) 100.6
Brand amortisation (1.4) - (1.4)
------------------------- ------- -------- -------- --------- --------------- -------------- -------
PBT 104.4 (5.2) 99.2
========================= ======= ======== ======== ========= =============== ============== =======
Audited 52 weeks ended 28 June 2020 - IFRS 16
DFS Sofology Subtotal Sofa Workshop Total Non underlying Total
before items
non underlying
items
------------------------ ------- -------- -------- ------------- --------------- -------------- -------
Gross sales(1) 735.3 181.7 917.0 18.0 935.0 - 935.0
========================= ======= ======== ======== ============= =============== ============== =======
Revenue 566.5 143.7 710.2 14.3 724.5 - 724.5
Cost of Sales (227.5) (72.3) (299.8) (7.6) (307.4) (3.1) (310.5)
------------------------- ------- -------- -------- ------------- --------------- -------------- -------
Gross Profit 339.0 71.4 410.4 6.7 417.1 (3.1) 414.0
Selling & Distribution
costs (205.3) (47.8) (253.1) (7.2) (260.3) (2.1) (262.4)
------------------------- ------- -------- -------- ------------- --------------- -------------- -------
Brand Contribution(1) 133.7 23.6 157.3 (0.5) 156.8 (5.2) 151.6
Property Costs (27.2) - (27.2)
Administrative Expenses (67.7) (0.2) (67.9)
------------------------- ------- -------- -------- ------------- --------------- -------------- -------
EBITDA(1) 61.9 (5.4) 56.5
Depreciation, amortisation and impairments
excl brand amortisation (87.5) (11.2) (98.7)
--------------------------------------------------------------------- --------------- -------------- -------
Operating Profit (25.6) (16.6) (42.2)
Interest (37.5) - (37.5)
------------------------- ------- -------- -------- ------------- --------------- -------------- -------
(63.1) (16.6) (79.7)
PBT pre brand amortisation(1)
Brand amortisation (1.5) - (1.5)
------------------------- ------- -------- -------- ------------- --------------- -------------- -------
PBT (64.6) (16.6) (81.2)
========================= ======= ======== ======== ============= =============== ============== =======
Unaudited 52 weeks ended 30 June 2019 - IAS 17
DFS Sofology Subtotal Sofa Workshop Total before Non underlying Total
non underlying items
items
----------------------------- ------- -------- -------- ------------- --------------- -------------- -------
Gross sales(1) 992.1 260.7 1,252.8 34.4 1,287.2 - 1,287.2
============================== ======= ======== ======== ============= =============== ============== =======
Revenue 762.6 205.9 968.5 27.7 996.2 - 996.2
Cost of Sales (306.6) (101.5) (408.1) (13.5) (421.6) - (421.6)
------------------------------ ------- -------- -------- ------------- --------------- -------------- -------
Gross Profit 456.0 104.4 560.4 14.2 574.6 - 574.6
Selling & Distribution
costs (248.3) (56.7) (305.0) (9.4) (314.4) - (314.4)
------------------------------ ------- -------- -------- ------------- --------------- -------------- -------
Brand Contribution(1) 207.7 47.7 255.4 4.8 260.2 - 260.2
Property Costs (107.5) - (107.5)
Administrative Expenses (62.5) (5.1) (67.6)
------------------------------ ------- -------- -------- ------------- --------------- -------------- -------
EBITDA(1) 90.2 (5.1) 85.1
Depreciation, amortisation and impairments
excl brand amortisation (29.3) - (29.3)
-------------------------------------------------------------------------- --------------- -------------- -------
Operating Profit 60.9 (5.1) 55.8
Interest (10.7) - (10.7)
------------------------------ ------- -------- -------- ------------- --------------- -------------- -------
PBT pre brand amortisation(1) 50.2 (5.1) 45.1
Brand amortisation (1.5) - (1.5)
------------------------------ ------- -------- -------- ------------- --------------- -------------- -------
PBT 48.7 (5.1) 43.6
============================== ======= ======== ======== ============= =============== ============== =======
Sales and revenue
Gross sales(1) increased 6.3% to GBP1,368.7m compared to the
pro-forma FY19 period (up 8.7% excluding the disposed Sofa Workshop
operation). The drivers of this growth and the consequent changes
in revenues are as described in the overview section above. Both
Sofology and DFS achieved high order intake growth significantly
above gross sales and revenue growth rates relative to the
pro-forma FY19 period (ex Sofa Workshop). However, the DFS brand
was better able than Sofology to grow the rate of delivery of
manufactured goods in the year, and given the strength of the
dfs.co.uk online web site traded particularly well in the lockdown
period thereby achieving a 10.2% growth in delivered gross sales(1)
, with Sofology delivering 3.3% gross sales(1) growth. Given the
current size of Sofology's order book and the growing use of Group
manufacturing relationships, we expect strong delivered gross
sales(1) growth from Sofology in FY22.
Revenue, which is stated after deducting VAT and the costs of
providing interest free credit and aftercare products increased at
a slightly higher rate than gross sales(1) , up 7.2% (or 9.7%
excluding Sofa Workshop) driven by a higher proportion of cash
purchases resulting in lower interest free credit costs.
Gross profit
Gross profit increased 4.6% to GBP601.2m compared to the
pro-forma FY19 period (up 6.6% excluding Sofa Workshop).
Gross profit as a percentage of revenue decreased from 57.7% in
the pro-forma FY19 period to 56.3%. This was principally due to a
mix effect with our internal manufacturing operation, which
captures an incremental manufacturing cash margin and predominantly
serves the DFS brand. Although operating at full capacity in the
first half of the year, the overall greater sales volumes in FY21
meant that internal manufacturing represented a lower proportion of
the total value of goods sold. This effect was exacerbated in the
second half of the year due to some Covid-19 related disruption
resulting in below-capacity production levels. Adjusting for this
mix effect, despite facing raw materials and shipping cost
inflation, underlying retail gross margin was broadly flat
year-on-year due to growth in average order value. Sofology gross
margin increased 1.9%pts from the pro-forma FY19 period to FY21,
reflecting the brand had no internal manufacturing mix impact and
also less of an increase in the web channel mix (which typically
has a lower gross margin).
While we have already seen and anticipate further inflation in
global shipping costs and raw materials, these factors are
industry-wide and are not expected to cause a deterioration of
sustainable gross profit margins.
We source around one quarter of the finished goods that we sell
from the Far East, and we pay for these in US dollars. We continue
to manage the risk from adverse US dollar exchange rate movements
for our annual spend of c.$180m-$190m, by hedging our US dollar
purchases to maintain 18 months cover by value. Our hedged rate for
FY21 was 6 cents lower (adverse) than the rates secured for FY20
and pro-forma FY19 period. Our hedged rate for FY22 is 3 cents
higher (favourable) to the average rate secured for FY21. Each one
cent movement in the dollar to sterling exchange rate impacts
profits by approximately GBP1m, however these impacts will be felt
by all industry participants who we anticipate will act to protect
profitability in the case of adverse rate movements and remain
'price competitive' in the case of favourable movements.
Selling & distribution costs and brand contribution (1)
Underlying (1) selling and distribution costs decreased by
GBP13.9m compared to the pro-forma FY19 period. Excluding Sofa
Workshop, the reduction in costs of GBP5.0m was driven by increased
effectiveness in our marketing approach through improved targeting.
This was partially offset by the higher sales volumes driving the
variable costs in our delivery network and wage commission models,
and Covid-19 related costs such as PPE.
Underlying brand contribution(1) of GBP300.7m for the year
represents an increase of GBP40.5m relative to the pro-forma FY19
period (an increase of GBP42.0m excluding Sofa Workshop) reflecting
the higher revenues.
Due to the impact of preparing our pro-forma FY19 period under
IAS 17 and subsequent periods under IFRS 16, we now compare the
following costs in FY21 with those incurred in FY20.
Property costs and administrative expenses
Property costs represent business rates and a small amount of
rental charges where we occupy premises on a 'hold-over' basis
(where the lease has expired) or for short term leases under a year
long. Property costs decreased GBP24.3m year-on-year due to the
suspension of UK business rates for the majority of our showroom
estate for the full financial year and the final quarter of the
previous financial year.
Underlying (1) administrative expenses of GBP75.2m increased by
GBP7.5m year-on-year due to performance recognition payments across
the business, investment to support our ongoing strategy, including
better use of data to target marketing, and some Covid-19 related
additional operating costs. As noted in our interim results, we
also recognised a one-off increase in our payment protection
insurance provision in connection with historical sales
transactions.
Depreciation, amortisation and interest
Total depreciation and amortisation charges of GBP85.3m were
GBP14.9m lower than FY20 predominantly due to non-underlying
impairment charges recognised last year in connection with the
disposal of Sofa Workshop.
Underlying (1) depreciation and amortisation charges (excluding
brand amortisation) reduced by GBP3.6m year-on-year primarily due
to lower IFRS16 charges on our right of use property assets as a
result of savings secured on existing leases and from the
assignment of leases following the disposal of Sofa Workshop. These
savings are partially offset by the impact of entering leases for
new Sofology showrooms.
Underlying (1) interest charges decreased GBP4.6m year-on-year
due to lower utilisation of our revolving credit facility and lower
IFRS16 interest charges. Total interest of GBP36.0m included
GBP3.1m of non-underlying refinancing costs as noted below.
Profit before tax
Underlying PBT excluding brand amortisation (1) of GBP105.8m
compares to a prior year loss, impacted by Covid, of GBP63.1m.
A total of GBP5.2m of non-underlying costs were incurred in FY21
in relation to the loss on disposal of Sofa Workshop (including
legal fees and other related costs), costs associated with the
refinancing of the Group's revolving credit facility and redundancy
costs associated with a major change to the DFS brand
administration function. Non-underlying costs in FY20 totalled
GBP16.6m in relation to the restructuring of Sofa Workshop and
Dwell brand and goodwill, brand name and property right of use
asset impairments.
FY20 GBPm FY21 GBPm
Brand, goodwill,
fixed asset and right
of use asset impairments (11.2) Refinancing costs (3.1)
------- ----------------------------- ------
Stock write-down
to net realisable
value (3.1) DFS admin team restructuring (1.4)
------- ----------------------------- ------
Residual Sofa Workshop
asset write-off and
Restructuring (1.3) disposal costs (0.7)
------- ----------------------------- ------
Total (16.6) Total (5.2)
------- ----------------------------- ------
Reported PBT of GBP99.2m was GBP180.4m higher than FY20, and
more than double the GBP43.6m for the pro-forma FY19 period.
Compared to the pro-forma FY19 period the increase in underlying
profit before brand amortisation (1) of GBP55.6m was driven by the
same factors as explained above. With a similar amount of
non-underlying costs incurred in FY19 the reported profit growth
was also GBP55.6m.
Tax
The reported effective tax rate for FY21 is 10.7%. This is lower
than the applicable UK Corporation Tax rate of 19.0% and is
primarily due to the change in tax rate used to calculate the
Group's deferred tax balances and also the utilisation of some
brought forward tax losses associated with one of our trading
subsidiaries which were previously not recognised.
Earnings per share
Basic earnings per share for the Group was 34.5 pence based on a
weighted average number of shares in issue for the year of 257.1m
(FY20 a loss of 31.4 pence per share).
Capital expenditure, cash flow and balance sheet
A strong trading performance combined with our negative working
capital cycle has resulted in high levels of operating cash flow
being generated in the year. This has enabled us to continue to
invest to deliver our strategy.
We incurred GBP49.2m of cash capital expenditure in the year.
This included GBP12.7m expenditure on the freehold acquisition of
one of our leased showrooms. Although this transaction secures in
perpetuity a strong retail location, this was an opportunistic
financial transaction that provides a favourable average c.13%
annual return on investment through no longer incurring GBP16.2m of
already committed future lease payments over the next c.9 years. We
do not currently expect that similar opportunities will arise in
our lease estate, albeit we remain willing to increase investment
levels where strong risk-adjusted returns are available and we have
appropriate financial resources to fund that investment.
Excluding this freehold acquisition the cash capital expenditure
of GBP36.5m was GBP13.1m above the relatively low level incurred in
the previous year whenn investments were held back to mitigate the
cash flow impact of the temporary pause in our operations. The
increase in spend was driven by investment in six new showrooms and
six part completed new showrooms, a significantly higher number of
refurbishments (utilising lockdown periods) as well as an increased
level of investment in technology to drive both operational
efficiency and continual improvements to our web proposition. In
addition. GBP2.9m of assets (predominantly delivery vehicles and
company cars) were acquired under lease arrangements (FY20
GBP5.3m).
We expect to invest approximately GBP35m across cash and
approximately GBP10m of finance leased assets in FY22 with a
potential additional GBP12-15m on new manufacturing investment
spread across FY22 and FY23.
Net bank debt (1) reduced by GBP138.7m to GBP19.0m in the period
and our leverage(1) (measured as net bank debt / last twelve month
operating cash flows before tax and excluding working capital
movements, less lease payments) fell to 0.2x (FY20 was
significantly negative due to the losses incurred). Our refinanced
GBP225m banking facility covenants remain consistent with our
facility pre Covid-19 at 3.0x maximum net debt / EBITDA and minimum
1.5x fixed charge cover, both measured on an IAS17 basis.
As we have highlighted previously, the DFS business model
benefits from negative working capital, with payments received from
customers upon delivery or through deposits ahead of delivery
overall, while our suppliers are paid to agreed terms. Working
capital balances are seasonal depending on recent trading activity,
cost seasonality (particularly in advertising spend) and
predictable patterns of payments on rents, tax payments and other
recurring charges. We carry limited inventory, and balances at year
end have remained relatively stable overall. The closing net bank
debt position at June 2021 benefits from higher levels of customer
deposits associated with the elevated order bank. As the order bank
normalises to more seasonal levels (which will be dependent on when
the elevated demand levels start to reduce), deferred rent payments
from the previous year are made and having now finalised the
deferred consideration due to the previous Sofology shareholders at
GBP4.7m there will be a c.GBP70m working capital outflow.
The Group's return on capital employed (1) for the period of
28.3% was significantly higher than the pre Covid-19 pro-forma FY19
16.6% return (calculated on a lease adjusted basis from IAS17
prepared financials) and driven by the higher profit.
Looking forward
In our June trading statement we provided three scenarios
illustrating the potential range of profit for our FY22 year. The
low and medium scenarios illustrated differing levels of order
intake relative to the pro-forma FY19 period. The medium scenario
assumed a step up in manufacturing and delivery capacity relative
to the pro-forma FY19 period and a third scenario illustrated that
additional profit could be driven by a further increase in capacity
and not additional order intake growth.
Pleasingly, order intake performance to date has been ahead of
the high case scenario and we continue to focus on increasing
manufacturing output and delivery throughput across our supply
chain. However, Covid-19 related absences have impacted our
operations and some of our suppliers. Compounded by raw material
shortages and shipping related disruption which are impacting the
whole sector, the lead times on our made to order products continue
to be longer than normal and we currently believe that the medium
case reflects the most likely profit outcome, and delivering on
this does still require an increase in weekly deliveries from
currently achieved levels.
The sector is experiencing cost inflation across a number of
categories including raw materials and logistics costs and we are
needing to over-invest in operating resources such as warehouse
space and colleague resourcing in order to mitigate the
unpredictability of the operating environment. The Group has a
track record of maintaining gross margins in periods of inflation
and differing foreign exchange rates and we are taking actions to
offset the current cost pressures. We have updated the scenarios
provided in the June trading statement to reflect the higher
revenues, largely driven by higher average order values, with
profits unchanged:
Scenario: Low Medium High
-------------------------------- ----- ------ -----
Order intake vs FY19 (excl Sofa
Workshop) 11% 15% 15%+
Revenue 1,133 1,180 1,205
Revenue growth vs FY19 (excl
Sofa Workshop) 17% 22% 24%
PBT 66 85 96
-------------------------------- ----- ------ -----
Subject to no sudden and material decline in order intake we
expect to remain operating with an elevated order bank at the end
of the FY22 period and consequently the strong order intake
experienced to date has the potential to support financial
performance in FY23.
We continue to target achieving revenue growth above upholstery
market rates from LFL market share gain and showroom rollout and
also to grow revenues in other home related categories,
particularly the sizeable UK beds market. With an intention to have
opened more than 20 new showrooms since 2019, and having evidence
of sustained market share gain and AOV growth, our outlook for FY23
and beyond is to sustain base revenues of at least GBP1.15bn and
achieve 7%+ PBT margins, with 75-80% of PBT converted to cash.
Dividends
In light of our strong financial position, significantly reduced
leverage and considering the strong cash flows we continue to
generate, the Board proposes to recommence dividends with a final
dividend for FY21 of 7.5 pence per share in line with historical
levels (FY19 7.5 pence per share). As stated in our published
Capital and Distribution policy, subject always to outlook and the
investment needs for the Group, we would intend to make ordinary
dividend payments at a payout ratio between 40% and 50% of annual
underlying cash generation.
Summary
The Group is in a strong position having gained market share,
holding a significant order bank and having strengthened our
balance sheet. We continue to operate in a market with high levels
of demand, and are trading well and generating strong cash flows.
Whilst the operating environment will likely remain challenging
with inflationary pressure, supply chain disruption and Covid-19
related colleague absences to manage we are confident in our
ability to deliver our strategy, achieve our previously disclosed
ambition to sustainably grow our profits and thereby provide strong
returns to our shareholders
Mike Schmidt
Chief Financial Officer
23 September 2021
(1) Refer to note 12 to the condensed consolidated financial
statements for definitions and reconciliations of alternative
performance measures.
Consolidated income statement
52 weeks to 2 7 June 52 weeks to 28 June
2021 2020
Underlying Non- Total Underlying Non- Total
underlying underlying
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Gross sales(1) 2 1,368.7 - 1,368.7 935.0 - 935.0
=============== ==== ============== ================= ============== ============== ================= ==============
Revenue 2 1,067.7 - 1,067.7 724.5 - 724.5
Cost of sales (466.5) - (466.5) (307.4) (3.1) (310.5)
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Gross profit 601.2 - 601.2 417.1 (3.1) 414.0
Selling and
distribution
costs (303.4) - (303.4) (287.5) (2.1) (289.6)
Administrative
expenses 3 (75.2) (2.1) (77.3) (67.7) (0.2) (67.9)
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Operating
profit before
depreciation
and
amortisation 222.6 (2.1) 220.5 61.9 (5.4) 56.5
Depreciation 3 (77.4) - (77.4) (81.9) - (81.9)
Amortisation 3 (7.9) - (7.9) (6.8) - (6.8)
Impairments - - - (0.3) (11.2) (11.5)
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Operating 2,
profit/(loss) 3 137.3 (2.1) 135.2 (27.1) (16.6) (43.7)
Finance income - - - 0.1 - 0.1
Finance
expenses 4 (32.9) (3.1) (36.0) (37.6) - (37.6)
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Profit/(loss)
before
tax 104.4 (5.2) 99.2 (64.6) (16.6) (81.2)
Taxation (11.9) 1.4 (10.5) 11.1 0.9 12.0
--------------- ---- -------------- ----------------- -------------- -------------- ----------------- --------------
Profit/(loss)
for the
year 92.5 (3.8) 88.7 (53.5) (15.7) (69.2)
=============== ==== ============== ================= ============== ============== ================= ==============
Earnings per share
Basic 536.0p (1.5)p 34.5p (24.3)p (7.1)p (31.4)p
=================== ===== ====== ===== ======= ====== =======
Diluted 535.6p (1.4)p 34.2p (24.3)p (7.1)p (31.4)p
=================== ===== ====== ===== ======= ====== =======
(1) Refer to note 12 to the condensed consolidated financial
statements for definitions and reconciliations of alternative
performance measures
Consolidated statement of comprehensive income
52 weeks 52 weeks
to to
2 7 June 28 June
2021 2020
GBPm GBPm
--------------------------------------------------- --------- --------
Profit/(loss) for the year 88.7 (69.2)
Other comprehensive income
Items that are or may be reclassified subsequently
to profit or loss:
Effective portion of changes in fair value
of cash flow hedges (22.4) 3.9
Net change in fair value of cash flow hedges
reclassified to profit or loss
Recognised in cost of sales 9.2 (8.3)
Recognised in finance expense 1.9 0.7
Income tax on items that are/may be reclassified
subsequently to profit or loss 2.6 0.4
--------------------------------------------------- --------- --------
Other comprehensive expense for the period,
net of income tax (8.7) (3.3)
--------------------------------------------------- --------- --------
Total comprehensive income/(expense) for the
period 80.0 (72.5)
=================================================== ========= ========
Consolidated balance sheet
Note 2 7 June 28 June
2021 2020
GBPm GBPm
----------------------------------------- ---- ----------------------- -------
Non-current assets
Property, plant and equipment 91.6 74.1
Right of use assets 345.1 384.5
Intangible assets 535.4 532.5
Other financial assets 0.1 0.8
Deferred tax assets 24.7 24.0
----------------------------------------- ---- ----------------------- -------
996.9 1,015.9
----------------------------------------- ---- ----------------------- -------
Current assets
Inventories 61.1 58.9
Other financial assets 0.1 4.5
Trade and other receivables 17.1 22.2
Current tax assets 6.9 7.8
Cash and cash equivalents 22.7 62.3
----------------------------------------- ---- ----------------------- -------
107.9 155.7
----------------------------------------- ---- ----------------------- -------
Total assets 1,104.8 1,171.6
========================================= ==== ======================= =======
Current liabilities
Bank overdraft (16.7) -
Trade payables and other liabilities (297.4) (216.0)
Lease liabilities (88.1) (88.6)
Provisions 9 (15.1) (11.9)
Other financial liabilities (6.7) (0.1)
----------------------------------------- ---- ----------------------- -------
(424.0) (316.6)
----------------------------------------- ---- ----------------------- -------
Non-current liabilities
Interest bearing loans and borrowings 10 (23.1) (218.7)
Lease liabilities (366.0) (428.6)
Provisions 9 (5.7) (3.9)
Other financial liabilities (1.5) (1.9)
----------------------------------------- ---- ----------------------- -------
(396.3) (653.1)
----------------------------------------- ---- ----------------------- -------
Total liabilities (820.3) (969.7)
========================================= ==== ======================= =======
Net assets 284.5 201.9
========================================= ==== ======================= =======
Equity attributable to equity holders
of the parent
Share capital 25.9 383.4
Share premium 40.4 40.4
Merger reserve 18.6 18.6
Capital redemption reserve 357.8 -
Treasury shares (0.7) (0.7)
Employee Benefit Trust shares (0.2) -
Cash flow hedging reserve (8.0) 3.3
Retained earnings (149.3) (243.1)
----------------------------------------- ---- ----------------------- -------
Total equity 284.5 201.9
========================================= ==== ======================= =======
Consolidated statement of changes in equity
Treasury Employee
Capital shares Benefit Cash flow
Share Share Merger redemption Trust hedging Retained Total
capital premium reserve reserve shares reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Balance at 30 June
201 9 319.5 40.4 18.6 - (2.1) - 7.0 (131.6) 251.8
Adjustment on
initial application
of IFRS 16 (net of
tax) - - - - - - - (26.4) (26.4)
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Adjusted balance at
1 July
2019 319.5 40.4 18.6 - (2.1) - 7.0 (158.0) 225.4
Loss for the year - - - - - - - (69.2) (69.2)
Other comprehensive
income/(expense) - - - - - - (3.7) 0.4 (3.3)
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Total comprehensive
income/(expense)
for the period - - - - - - (3.7) (68.8) (72.5)
Dividends - - - - - - - (15.9) (15.9)
Purchase of own
shares - - - - (1.1) - - - (1.1)
Treasury shares
issued - - - - 2.5 - - (1.2) 1.3
Shares issue 63.9 - - - - - - - 63.9
Settlement of share
based
payments - - - - - - - (1.6) (1.6)
Share based payments - - - - - - - 2.4 2.4
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Balance at 28 June
2020 383.4 40.4 18.6 - (0.7) - 3.3 (243.1) 201.9
Profit for the year - - - - - - - 88.7 88.7
Other comprehensive
income/(expense) - - - - - - (11.3) 2.6 (8.7)
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Total comprehensive
income/(expense)
for the period - - - - - - (11.3) 91.3 80.0
Issue of shares to
Employee
Benefit Trust 0.3 - - - - (0.3) - - -
Employee Benefit
Trust shares
issued - - - - - 0.1 - 1.0 1.1
Repurchase and
cancellation
of deferred
shares (357.8) - - 357.8 - - - - -
Settlement of
share based
payments - - - - - - - (2.1) (2.1)
Share based
payments - - - - - - - 3.6 3.6
-------------------- -------- -------- -------- ----------- ---------- ---------- --------- --------- -------
Balance at 2 7 June
2021 25.9 40.4 18.6 357.8 (0.7) (0.2) (8.0) (149.3) 284.5
==================== ======== ======== ======== =========== ========== ========== ========= ========= =======
Consolidated cash flow statement
52 weeks 52 weeks
to to
2 7 June 28 June
2021 2020
GBPm GBPm
-------------------------------------------------------- --------- --------
Profit/(loss) for the period 88.7 (69.2)
Adjustments for:
Income tax expense/( credit) 10.5 (12.0)
Financ e income - (0.1)
Financ e expenses 32.9 37.6
Exceptional financing costs 3.1 -
Depreciation of property, plant and equipment 19.7 21.3
Depreciation of right of use assets 57.7 60.6
Amortisation of intangible assets 7.9 6.8
Impairment of assets - 11.5
Gain on sale of property, plant and equipment (1.2) (1.1)
Gain on disposal of right of use assets (1.4) -
Loss on sale of subsidiaries 0.7 -
Settlement of share based payments (2.1) (1.6)
Share based payment expense 3.6 2.4
Decrease/(increase) in trade and other receivables 4.6 (1.6)
Increase in inventories (2.2) (4.1)
Increase in trade and other payables 81.4 4.7
Increase in provisions 3.3 6.6
-------------------------------------------------------- --------- --------
Net cash from operating activities before tax 307.2 61.8
Tax paid (8.2) (6.1)
-------------------------------------------------------- --------- --------
Net cash from operating activities 299.0 55.7
Investing activities
Proceeds from sale of property, plant and equipment 1.5 1.4
Proceeds received from sale of subsidiaries 0.3 -
Interest received - 0.1
Acquisition of property, plant and equipment (38.0) (16.8)
Acquisition of other intangible assets (11.2) (6.6)
-------------------------------------------------------- --------- --------
Net cash used in investing activities (47.4) (21.9)
Financing activities
Interest paid (6.1) (9.0)
Interest paid on lease liabilities (26.7) (29.2)
Payment of lease liabilities (77.1) (36.3)
Exceptional financing costs (4.1) -
(Repayment)/drawdown of borrowings (195.0) 25.0
Proceeds on issue of shares 0.3 63.9
Purchase of own shares (0.3) (1.1)
Proceeds from sale of own shares 1.1 1.3
Ordinary dividends paid - (15.9)
-------------------------------------------------------- --------- --------
Net cash used in financing activities (307.9) (1.3)
Net (decrease)/increase in cash and cash equivalents (56.3) 32.5
Cash and cash equivalents at beginning of period 62.3 29.8
-------------------------------------------------------- --------- --------
Cash and cash equivalents (including bank
overdrafts) at end of period 6.0 62.3
======================================================== ========= ========
Notes to the condensed consolidated financial statements
1 Basis of preparation
The condensed consolidated financial statements have been
prepared and approved by the directors in accordance with both
international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial
Reporting Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union. The financial
information is derived from the Group's consolidated financial
statements for the year ended 27 June 2021.The financial statements
are prepared on the historical cost basis except for certain
financial instruments and share based payment charges which are
measured at their fair value. The financial statements are for the
52 weeks to 27 June 2021 (last year 52 weeks to 28 June 2020) and
were approved by the Directors on 23 September 2021.
The financial information set out above does not constitute the
company's statutory accounts for the periods ended 27 June 2021 or
28 June 2020 but is derived from those accounts. Statutory accounts
for the period ended 28 June 2020 have been delivered to the
registrar of companies, and those for the period ended 27 June 2021
will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
Going concern
The financial statements are prepared on a going concern basis,
which the directors believe to be appropriate for the following
reasons.
The Group has a GBP225.0m revolving credit facility with a
consortium of seven banks maturing in December 2023, with two
one-year options to extend the facility, subject to mutual
agreement. At 20 September 2021, GBP217.0m of the revolving credit
facility remained undrawn, in addition to cash in hand, at bank of
GBP9.0m.
Covenants applicable to the revolving credit facility are
consistent with those on the previous facility (prior to the
temporary alternative covenants in place from April 2020 to
December 2020): 3.0x net Debt/EBITDA and 1.5x Fixed Charge Cover,
and are assessed on a six-monthly basis at June and December. The
Directors have prepared cash flow forecasts for the Group covering
a period of at least twelve months from the date of approval of
these financial statements, which indicate that the Group will be
in compliance with these covenants. These forecasts include a
number of assumptions in relation to: market size and the Group's
order intake; impacts on gross margin from regulatory and other
changes; sector-wide manufacturing and supply chain capacities; and
achievement of cost savings in line with the Group's strategic
plans.
The Directors have also prepared severe but plausible downside
sensitivity scenarios which cover the same period as the base case.
These scenarios included: further two month Covid-19 related
showroom closures; significantly reduced customer spending; and
impacts on gross margin from inflationary cost pressures. As part
of this analysis, mitigating actions within the Group's control
should these severe but plausible scenarios occur have also been
considered. These mitigating actions included reducing
discretionary advertising expenditure, a pause on expansionary
capital investment and other measures to protect cash balances.
These forecast cash flows, considering the ability and intention of
the Directors to implement mitigating actions should they need to,
indicate that there remains sufficient headroom in the forecast
period for the Group to operate within the committed facilities and
to comply with all relevant banking covenants during the forecast
period.
1 Basis of preparation (continued)
The Directors have considered all of the factors noted above,
including the inherent uncertainty in forecasting the impact of the
Covid-19 pandemic, and are confident that the Group has adequate
resources to continue to meet all liabilities as and when they fall
due for the foreseeable future and at least twelve months from the
date of approval of these financial statements. Accordingly, the
financial statements are prepared on a going concern basis.
2 Segmental Analysis
The Group's operating segments under IFRS 8 have been determined
based on management accounts reports reviewed by the Group
Leadership Team. Segment performance is assessed based upon brand
contribution. Brand contribution is defined as underlying EBITDA
(being earnings before interest, tax, depreciation, amortisation,
and non-underlying items) excluding property costs and central
administration costs.
The Group reviews and manages the performance of its operations
on a retail brand basis, and the identified reportable segments and
the nature of their business activities are as follows:
DFS: the manufacture and retailing of upholstered furniture and
related products through DFS and Dwell branded stores and
websites.
Sofology: the retailing of upholstered furniture and related
products through Sofology branded stores and website.
During the current financial year, the retail operations and
management of the Dwell brand were combined with the DFS brand and
accordingly they are now presented as one segment. Prior year
comparative figures have been re-presented to align with the
revised presentation. Other segment activities comprise the
retailing of upholstered and related products through Sofa Workshop
until it was disposed of on 18 September 2020.
Segment revenue and profit
External sales Internal sales Total gross sales
52 weeks 52 weeks 52 weeks 52 weeks 52 weeks 52 weeks
to to to to to to
27 June 28 June 27 June 28 June 27 June 28 June
2021 2020 2021 2020 2021 2020
Re-presented Re-presented Re-presented
GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------- ------------- -------- ------------- -------- -------------
DFS 1,093.2 735.3 - - 1,093.2 735.3
Sofology 269.2 181.7 - - 269.2 181.7
Other segments 6.3 18.0 - - 6.3 18.0
Eliminations - - - - - -
--------------- -------- ------------- -------- ------------- -------- -------------
Gross sales 1,368.7 935.0 - - 1,368.7 935.0
================ ======== ============= ======== ============= ======== =============
2 Segmental Analysis (continued)
Segment revenue and profit (continued)
52 weeks to 52 weeks to
27 June 2021 28 June 2020
GBPm GBPm
---------------------------------------- ------------- -------------
Total segments gross sales 1,368.7 935.0
Less: value added and other sales taxes (217.4) (146.4)
Less: costs of interest free credit and
aftercare products (83.6) (64.1)
---------------------------------------- ------------- -------------
Revenue 1,067.7 724.5
======================================== ============= =============
Of which:
Furniture sales 1,013.2 676.0
Sales of aftercare products 54.5 48.5
---------------------------------------- ------------- -------------
Revenue 1,067.7 724.5
======================================== ============= =============
52 weeks to 27 June 2021
DFS Sofology Other Total
GBPm GBPm GBPm GBPm
---------------------------- ----------------- ------------------- ----------------------- -----------------------
Revenue 848.0 214.6 5.1 1,067.7
Cost of sales (363.4) (101.8) (1.3) (466.5)
---------------------------- ----------------- ------------------- ----------------------- -----------------------
Gross profit 484.6 112.8 3.8 601.2
Selling & distribution costs
(excluding property costs) (244.4) (55.6) (0.5) (300.5)
---------------------------- ----------------- ------------------- ----------------------- -----------------------
Brand contribution (segment
profit) 240.2 57.2 3.3 300.7
Property costs (2.9)
Underlying administrative
expenses (75.2)
---------------------------- ----------------- ------------------- ----------------------- -----------------------
Underlying EBITDA 222.6
============================ ================= =================== ======================= =======================
52 weeks to 28 June 2020
DFS Sofology Other Total
Re-presented Re-presented
GBPm GBPm GBPm GBPm
----------------------------- ------------- -------- ------------- -------
Revenue 566.5 143.7 14.3 724.5
Cost of sales (227.5) (72.3) (7.6) (307.4)
----------------------------- ------------- -------- ------------- -------
Gross profit 339.0 71.4 6.7 417.1
Selling & distribution costs
(excluding property costs) (205.3) (47.8) (7.2) (260.3)
----------------------------- ------------- -------- ------------- -------
Brand contribution (segment
profit) 133.7 23.6 (0.5) 156.8
Property costs (27.2)
Underlying administrative
expenses (67.7)
----------------------------- ------------- -------- ------------- -------
Underlying EBITDA 61.9
============================= ============= ======== ============= =======
2 Segmental Analysis (continued)
Segment revenue and profit (continued)
52 weeks 52 weeks
to to
27 June 2021 28 June 2020
GBPm GBPm
----------------------------- ------------- -------------
Underlying EBITDA 222.6 61.9
Non-underlying items (2.1) (16.6)
Depreciation & amortisation (85.3) (88.7)
Impairments - (0.3)
----------------------------- ------------- -------------
Operating profit 135.2 (43.7)
Finance income 0.1
Finance expenses (32.9) (37.6)
Non-underlying finance costs (3.1) -
----------------------------- ------------- -------------
Profit/(loss) before tax 99.2 (81.2)
============================= ============= =============
A geographical analysis of revenue is presented below:
52 weeks 52 weeks
to to
27 June 2021 28 June 2020
GBPm GBPm
--------------- ------------- -------------
United Kingdom 1,044.6 701.7
Europe 23.1 22.8
--------------- ------------- -------------
Total revenue 1,067.7 724.5
=============== ============= =============
Segment assets and liabilities
Assets Liabilities
27 June 28 June 27 June 28 June
2021 2020 2021 2020
Re-presented Re-presented
GBPm GBPm GBPm GBPm
------------------------------- ------- ------------ ------- ------------
DFS 903.4 997.0 (659.2) (595.4)
------- ------------ ------- ------------
Sofology 174.1 145.5 (157.8) (143.9)
------- ------------ ------- ------------
Other segments - 7.5 - (25.2)
------------------------------- ------- ------------ ------- ------------
Total segments 1,077.5 1,150.0 (817.0) (764.5)
------- ------------ ------- ------------
Loans and financing - - (23.1) (218.7)
------- ------------ ------- ------------
Financial assets/(liabilities) 0.2 5.3 (8.2) (2.0)
------- ------------ ------- ------------
Current tax 6.9 7.8 - -
------- ------------ ------- ------------
Deferred tax 24.7 24.0 - -
------- ------------ ------- ------------
Eliminations (4.5) (15.5) 28.0 15.5
------------------------------- ------- ------------ ------- ------------
Total Group 1,104.8 1,171.6 (820.3) (969.7)
=============================== ======= ============ ======= ============
Segment assets comprises tangible and intangible non-current
assets including goodwill and brand names, inventories, trade and
other receivables, cash and cash equivalents. Segment liabilities
comprises trade payables and current and non-current other
liabilities and provisions.
2 Segmental Analysis (continued)
Segment assets and liabilities (continued)
Additions to non-current Depreciation and
assets amortisation
52 weeks 52 weeks 52 weeks 52 weeks
to to to to
27 June 28 June 27 June 28 June
2021 2020 2021 2020
Re-presented Re-presented
GBPm GBPm GBPm GBPm
--------------- ---------- -------------- -------- ------------
DFS 51.6 22.9 66.4 68.3(1)
---------- -------------- -------- ------------
Sofology 17.9 7.6 17.8 18.8(2)
---------- -------------- -------- ------------
Other segments - 0.6 1.1 13.1(3)
--------------- ---------- -------------- -------- ------------
Total Group 69.5 31.1 85.3 100.2
=============== ========== ============== ======== ============
Additions to non-current assets include both tangible and
intangible non-current assets.
1. 2020: DFS: includes impairment charges of GBP1.4m
2. 2020: Sofology: includes impairment charges of GBP0.3m
3. 2020: Other segments: includes impairment charges of GBP9.8m
3 Operating profit
Group operating profit is stated after charging/(crediting):
52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
GBPm GBPm
--------------------------------------------- --------- -------------
Depreciation on tangible assets (including
depreciation on right of use assets) 77.4 81.9
---------
Amortisation of intangible assets 7.9 6.8
---------
Impairment of tangible assets - 5.2
---------
Impairments of intangible assets - 1.0
---------
Impairment of goodwill - 5.3
---------
Net gain on disposal of property, plant and
equipment (1.2) (1.1)
---------
Net gain on disposal of right of use assets (1.4) -
Cost of inventories recognised as an expense 465.5 317.1
Write down of inventories to net realisable
value 5.6 7.2
Other cost of sales variances (4.6) (13.8)
Operating lease rentals 0.5 1.9
============================================= --------- =============
During the period the Group did not receive any Government
support through the Coronavirus Job Retention Scheme (2020:
GBP19.5m).
Non-underlying items 52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
GBPm GBPm
----------------------------------------------- --------- -------------
Restructuring costs 1.4 2.3
Impairment of goodwill and brand names - 6.3
Impairment of tangible and right of use assets - 4.9
Write down of inventories on restructuring - 3.1
Loss on disposal of subsidiaries 0.7 -
----------------------------------------------- --------- -------------
2.1 16.6
=============================================== ========= =============
On 18 September 2020, the Group formally completed the sale of
the entire issued share capital of The Sofa Workshop Limited for
cash consideration of GBP0.3m. The loss on disposal includes
professional fees, property guarantees and other costs associated
with the disposal.
In addition, non-underlying redundancy costs of GBP1.4m were
incurred in the year in respect of a significant operational
restructuring of the DFS sales administration function.
3 Operating profit (continued)
In the 52 weeks to 28 June 2020, non-underlying costs arose in
connection with the restructure of the Dwell brand and the sale of
Sofa Workshop following the end of the financial year. The goodwill
relating to Sofa Workshop was fully impaired, together with the
right of use and other tangible assets relating to stores being
closed, and the brand name was written down to GBP0.3m. In
addition, related inventories impacted by the restructure were
written down to a reduced net realisable value. Other restructuring
costs included redundancy costs and operational costs associated
with exiting closed locations.
4 Finance expense
52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
GBPm GBPm
-------------------------------------------- --------- -------------
Interest payable on senior revolving credit
facility (4.2) (7.6)
Bank fees (2.0) (0.5)
Unwind of discount on provisions (0.1) -
Interest on lease liabilities (26.5) (29.2)
Other interest (0.1) (0.3)
-------------------------------------------- --------- -------------
Total underlying finance expense (32.9) (37.6)
Non-underlying items:
Refinancing costs (3.1) -
-------------------------------------------- --------- -------------
Total finance costs (36.0) (37.6)
============================================ ========= =============
Non-underlying finance costs of GBP3.1m relate to the
refinancing of the Group's revolving credit facility in December
2020. This includes the write off of unamortised underwriting fees
associated with the old revolving credit facility, break costs
associated with exiting interest rate swaps that were no longer
required, and professional fees incurred in relation to the
arrangement of the new revolving credit facility.
5 Earnings per share
52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
pence pence
------------------------------------------------ ------------ -------------
Basic earnings per share 34.5 (31.4)
Diluted earnings per share 34.2 (31.4)
================================================ ============ =============
52 weeks 52 weeks
to to
27 June 28 June 2020
2021
GBPm GBPm
------------------------------------------------ ------------ -------------
Profit/(loss) attributable to equity holders
of the parent company 88.7 (69.2)
================================================ ============ =============
27 June 2021 28 June 2020
No. No.
------------------------------------------------ ------------ -------------
Weighted average number of shares for basic
earnings per share 257,096,686 220,289,976
Dilutive effect of employee share based payment
awards 2,352,481 -
------------------------------------------------ ------------ -------------
Weighted average number of shares for diluted
earnings per share 259,449,167 220,289,976
================================================ ============ =============
5 Earnings per share (continued)
Underlying earnings per share
Underlying basic earnings per share and underlying diluted
earnings per share are calculated by dividing the profit for the
period attributable to ordinary equity holders of the parent
company, as adjusted to exclude the effect of non-underlying items,
by the same weighted average numbers of ordinary shares above used
for basic and diluted earnings per share respectively.
52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
GBPm GBPm
--------------------------------------------------- --------- -------------
Profit/(loss) for the year attributable to
equity holders of the parent company 88.7 (69.2)
Non-underlying loss after tax 3.8 15.7
--------------------------------------------------- --------- -------------
Underlying profit/(loss) for the year attributable
to equity holders of the parent 92.5 (53.5)
=================================================== ========= =============
52 weeks 52 weeks
to to
2 7 June 28 June 2020
2021
pence pence
--------------------------------------------------- --------- -------------
Underlying basic earnings per share 36.0 (24.3)
Underlying diluted earnings per share 35.6 (24.3)
=================================================== ========= =============
6 Dividends
Pence 52 weeks 52 weeks
per to to
ordinary 27 June 2021 28 June 2020
share
-------------------------------- --------- ------------- -------------
GBPm GBPm
Final ordinary dividend for FY1
9 7.5p - 15.9
--------------------------------- --------- ------------- -------------
-
- 15.9
================================ ========= ============= =============
The Directors recommend a final dividend of 7.5p in respect of
the financial period ended 27 June 2021, resulting in a total
proposed dividend of GBP19.4m. Subject to shareholder approval it
is intended that this dividend will be paid on 23 December 2021.
DFS Furniture plc shares will trade ex-dividend from 25 November
2021 and the record date will be 26 November 2021. This dividend
has not therefore been recognised as a liability in these financial
statements.
7 Financial instruments
All derivatives are categorised as Level 2 under the
requirements of IFRS 7 as they are valued using techniques based
significantly on observed market data.
Financial liabilities measured at fair value through profit and
loss relate to acquisition contingent consideration and are
categorised as level 3 under the requirements of IFRS 7 as they are
not based on observable market data.
The Directors have reviewed for expected credit losses and
consider the amount of any such losses to be immaterial.
The Directors consider that the fair values of each category of
the Group's financial instruments are the same as their carrying
values in the Group's balance sheet.
8 Capital expenditure
For the 52 weeks to 27 June 2021, additions of property, plant
and equipment (including those acquired under finance leases)
totalled GBP58.3m (2020: GBP24.5m). Additions of intangible assets
(computer software) totalled GBP11.2m (2020: GBP6.6m).
At 27 June 2021 the Group had contracted capital commitments of
GBP3.6m (2020: GBP1.7m) for which no provision has been made in the
financial statements.
9 Provisions
Guarantee Property Other
provision provisions provisions Total
GBPm GBPm GBPm GBPm
--------------------------- ---------- ----------- ----------- -----
Balance at 28 June 2020 8.1 1.6 6.1 15.8
Provisions made during
the period 6.6 3.1 3.2 12.9
Provisions reclassified
during the period - 0.8 - 0.8
Provisions used during
the period (5.6) - (1.1) (6.7)
Provisions released on
disposal of subsidiary - (0.7) - (0.7)
Provisions released during
the period - (1.1) (0.2) (1.3)
--------------------------- ---------- ----------- ----------- -----
Balance at 27 June 2021 9.1 3.7 8.0 20.8
=========================== ========== =========== =========== =====
Current 6.2 0.9 8.0 15.1
Non-current 2.9 2.8 - 5.7
--------------------------- ---------- ----------- ----------- -----
9.1 3.7 8.0 20.8
=========================== ========== =========== =========== =====
The Group offers a long-term guarantee on its upholstery
products and in accordance with accounting standards a provision is
maintained for the expected future cost of fulfilling these
guarantees on products which have been delivered before the
reporting date. In calculating this provision the key areas of
estimation are the number of future claims, average cost per claim
and the expected period over which claims will arise (nearly all
claims arise within two years of delivery). The Group has
considered the sensitivity of the calculation to these key areas of
estimation, and determined that a 10% change in either the average
cost per claim or the number of expected future calls would change
the value of the calculated provision by GBP0.9m. The directors
have therefore concluded that reasonably possible variations in
estimate would not result in a material difference.
Property provisions relate to potential obligations under lease
guarantees offered to former subsidiary companies, the majority of
which expire in 2025, and repair and remediation costs for Group
properties based on anticipated lease expiries and renewals, which
will predominantly be utilised more than five years from the
reporting date.
Other provisions relate to payment of refunds to customers for
payment protection insurance policies and other regulatory costs,
and deferred consideration payable on the Group's November 2017
acquisition of Sofology. Subsequent to the balance sheet date, the
deferred consideration was finalised and settled on 11 August
2021.
10 Net debt
28 June Other non-cash 2 7 June
2020 Cash flow changes 2021
GBPm GBPm GBPm GBPm
----------------- ---------- ----------------- -------------- -----------
Cash in hand,
at bank 62.3 (39.6) - 22.7
Bank overdraft - (16.7) - (16.7)
------------------ ---------- ----------------- -------------- -----------
Cash and cash
equivalents 62.3 (56.3) - 6.0
Senior revolving
credit facility (218.7) 195.0 0.6 (23.1)
Finance lease
liabilities (517.2) 77.1 (14.0) (454.1)
------------------ ---------- ----------------- -------------- -----------
Total net debt (673.6) 215.8 (13.4) (471.2)
================== ========== ================= ============== ===========
IFRS 16 Other non-cash 28 June
30 June 2019 transition Cash flow changes 2020
GBPm GBPm GBPm GBPm GBPm
----------------- ------------ ------------------------ ----------------- -------------- ----------
Cash in hand,
at bank 29.8 - 32.5 - 62.3
----------------- ------------ ------------------------ ----------------- -------------- ----------
Cash and cash
equivalents 29.8 - 32.5 - 62.3
Senior revolving
credit facility (194.0) - (25.0) 0.3 (218.7)
Finance lease
liabilities (12.1) (536.6) 36.3 (4.8) (517.2)
----------------- ------------ ------------------------ ----------------- -------------- ----------
Total net debt (176.3) (536.6) 43.8 (4.5) (673.6)
================= ============ ======================== ================= ============== ==========
Non-cash changes include the addition of leases within the
period of GBP20.3m (2020: GBP7.7m), lease remeasurements of
GBP13.5m (2020: GBP2.9m), disposals of leases of GBP13.6m (GBPnil),
impact of the disposal of Sofa Workshop on lease liabilities of
GBP6.2m (2020: GBPnil) and the amortisation of capitalised debt
issue costs of GBP0.6m (2020: GBP0.3m).
11 Annual General Meeting
The Annual General Meeting will be held on 12 November 2021 at 1
Rockingham Way, Redhouse Interchange, Adwick-le-Street, Doncaster,
DN6 7NA. The Annual Report and Accounts and Notice of Meeting will
be sent to shareholders and copies will be available from the
Company's registered office: 1 Rockingham Way, Redhouse
Interchange, Adwick-le-Street, Doncaster, DN6 7NA and on the
Company's website at www.dfscorporate.co.uk .
12 Alternative Performance Measures
In reporting the Group's financial performance, the Directors
make use of a number of alternative performance measures (APMs) in
addition to those defined or specified under EU-adopted
International Financial Reporting Standards (IFRS).
The Directors consider that these APMs provide useful additional
information to support understanding of underlying trends and
business performance. In particular, APMs enhance the comparability
of information between reporting periods by adjusting for
non-underlying items. APMs are therefore used by the Group's
Directors and management for internal performance analysis,
planning and incentive setting purposes in addition to external
communication of the Group's financial results.
In order to facilitate understanding of the APMs used by the
Group, and their relationship to reported IFRS measures,
definitions and numerical reconciliations are set out below.
Reconciliations relating to the unaudited pro-forma FY19 period (52
weeks ended 30 June 2019) were set out in the FY20 and FY19 annual
reports. Definitions of APMs may vary from business to business and
accordingly the Group's APMs may not be directly comparable to
similar APMs reported by other entities.
APM Definition Rationale
------------------------ ----------------------------------- ---------------------------------
Gross sales Amounts payable by external Key measure of overall
customers for goods and sales performance which
services supplied by unlike IFRS revenue is
the Group, including not affected by the extent
aftercare services (for to which customers take
which the Group acts up the Group's interest
as an agent), delivery free credit offering.
charges and value added
and other sales taxes.
------------------------ ----------------------------------- ---------------------------------
Brand contribution Gross profit less selling Measure of brand-controllable
and distribution costs, profit as it excludes
excluding property and shared Group costs.
administration costs.
------------------------ ----------------------------------- ---------------------------------
EBITDA(1) Earnings before interest, A commonly used profit
taxation, depreciation measure.
and amortisation.
------------------------ ----------------------------------- ---------------------------------
Non-underlying Certain material, unusual Clear and separate identification
items or non-recurring items of such items facilitates
which the directors believe understanding of underlying
are not indicative of trading performance.
the Group's underlying
performance.
------------------------ ----------------------------------- ---------------------------------
Underlying EBITDA(1) Earnings before interest, Profit measure reflecting
taxation, depreciation underlying trading performance.
and amortisation, as
adjusted for non-underlying
items
------------------------ ----------------------------------- ---------------------------------
Underlying profit Profit before tax adjusted Profit measure widely
before tax and for non-underlying items used by investors and
brand amortisation and amortisation associated analysts.
PBT(A) with the acquired brands
of Sofology and Dwell.
------------------------ ----------------------------------- ---------------------------------
Underlying earnings Post-tax earnings per Exclusion of non-underlying
per share share as adjusted for items facilitates year
non-underlying items. on year comparisons of
the key investor measure
of earnings per share.
------------------------ ----------------------------------- ---------------------------------
Net bank debt Balance drawn down on Measure of the Group's
interest-bearing loans, cash indebtedness which
with unamortised issue supports assessment of
costs added back, less available liquidity and
cash and cash equivalents cash flow generation in
(including bank overdrafts). the reporting period.
------------------------ ----------------------------------- ---------------------------------
Cash EBITDA Net cash from operating Measure of the operating
activities before tax cash generation of the
less movements on working business normalised to
capital and provisions reflect timing differences
balances and payments in working capital movements.
made under lease obligations.
------------------------ ----------------------------------- ---------------------------------
Leverage (or gearing)(2) The ratio of period end Key measure which indicates
net debt to underlying the relative level of
EBITDA for the previous borrowing to operating
twelve months. cash generation, widely
used by investors and
analysts.
------------------------ ----------------------------------- ---------------------------------
U nderlying return Underlying post tax profit Represents the post-tax
on capital employed expressed as a percentage return the Group achieves
(underlying ROCE)(1) of the sum of property, on the investment it has
plant & equipment, computer made in its business.
software, right of use
assets and working capital.
======================== =================================== =================================
Underlying free The change in net bank Measure of the underlying
cash flow to equity debt for the period after cash return generated
holders adding back dividends, for shareholders in the
acquisition related consideration, period and a key financial
share based transactions for Executive Director
and non-underlying cash remuneration.
flows.
======================== =================================== =================================
1.Following the adoption of IFRS 16, EBITDA/Underlying EBITDA
are less useful as performance measures and accordingly are no
longer presented as Key Performance Indicators or Financial
Highlights.
2. Definition revised following adoption of IFRS 16.
Key performance indicators
Reconciliations to IFRS measures
EBITDA FY21 FY20
Note GBPm GBPm
------------------------ ---- ----------------- ------
Operating profit/(loss) 2 135.2 (43.7)
Depreciation 3 77.4 81.9
Amortisation 3 7.9 6.8
Impairments 3 - 11.5
------------------------ ---- ----------------- ------
EBITDA 220.5 56.5
======================== ==== ================= ======
Underlying EBITDA FY21 FY20
Note GBPm GBPm
------------------------------- ---- ----- ----
EBITDA 220.5 56.5
Non-underlying operating items 3 2.1 5.4
------------------------------- ---- ----- ----
Underlying EBITDA 222.6 61.9
=============================== ==== ===== ====
Underlying profit before tax and brand FY21 FY20
amortisation - PBT(A)
Note GBPm GBPm
------------------------------------ ---- ----- ------
Profit /(loss) before tax 2 99.2 (81.2)
Non-underlying items 3,4 5.2 16.6
Amortisation of brand names 1.4 1.5
------------------------------------ ---- ----- ------
Underlying (loss)/profit before tax
and brand amortisation 105.8 (63.1)
==================================== ==== ===== ======
Net Bank debt FY21 FY20
GBPm GBPm
-------------------------------------- ----- ------
Interest bearing loans and borrowings 23.1 218.7
Unamortised issue costs 1.9 1.3
Cash and cash equivalents (Including
bank overdraft) (6.0) (62.3)
---------------------------------------- ----- ------
Net bank debt 19.0 157.7
======================================== ===== ======
Leverage FY21 FY20
GBPm GBPm
----------------------------------- ------ -----------------
Net bank debt (A) 19.0 157.7
Net cash from operating activities
before tax 307.2 61.8
less
Movement in trade and other
receivables (4.6) 1.6
Movement in inventories 2.2 4.1
Movement in trade and other
payables (81.4) (4.7)
Movement in provisions (3.3) (6.6)
Payment of lease liabilities (26.7) (29.2)
Payment of interest on leases (77.1) (36.3)
------------------------------------- ------ -----------------
Cash EBITDA (B) 116.3 (9.3)
Leverage (A/B) 0.2x (17.0)x
===================================== ====== =================
Underlying return on capital FY21 FY20
employed
GBPm GBPm
------------------------------ ------- -------
Profit before tax 99.2 (81.2)
Non-underlying items 5.2 16.6
-------------------------------- ------- -------
Pre-tax return 104.4 (64.6)
Effective tax rate 10.7% 17.1%
Tax adjusted return (A) 93.2 (53.6)
Property, plant and equipment 91.6 74.1
ROU assets 345.1 384.5
Computer software 16.4 11.8
-------------------------------- ------- -------
453.1 470.4
Inventories 61.1 58.9
Trade receivables 9.3 10.4
Prepayments 7.2 10.1
Accrued income 0.4 0.9
Other receivables 0.2 0.8
Payments received on account (117.7) (86.8)
Trade payables (83.9) (41.9)
-------------------------------- ------- -------
Working capital (123.4) (47.6)
Total capital employed (B) 329.7 422.8
Underlying ROCE (A/B) 28.3% (12.7)%
================================ ======= =======
Underlying free cash flow to equity FY21 FY20
holders
Note GBPm GBPm
------------------------------------ ---- ----- ------
Movement in net bank debt 138.7 7.5
Dividends 6 - 15.9
Proceeds on issue of shares (0.3) (63.9)
Purchase of own shares 0.3 1.1
Proceeds from sale of own shares (1.1) (1.3)
Non-underlying cash items disclosed
in cash flow statement 4.1 -
------------------------------------ ---- ----- ------
Underlying free cash flow to equity
holders 141.7 (40.7)
==================================== ==== ===== ======
This preliminary results statement, the full text of the Stock
Exchange announcement and the results presentation can be found on
the Company's website at www.dfscorporate.co.uk
This report contains statements that constitute forward-looking
statements relating to the business, financial performance and
results of the Company and the industry in which the Company
operates. These statements may be identified by words such as
"may", "will", "shall", "anticipate", "believe", "intend",
"project", "goal", "expectation", "belief", "estimate", "plan",
"target", or "forecast" and similar expressions for the negative
thereof; or by forward-looking nature of discussions of strategy,
plans or intentions; or by their context. No representation is made
that any of these statements or forecasts will come to pass or that
any forecast results will be achieved. All statements regarding the
future are subject to inherent risks and uncertainties and various
factors that would cause actual future results, performance or
events to differ materially from those described or implied in
these statements. Such forward-looking statements are based on
numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will
operate in the future. Further, certain forward-looking statements
are based upon assumptions of future events which may not prove to
be accurate and neither the Company nor any other person accepts
any responsibility for the accuracy of the opinions expressed in
this interim report or the underlying assumptions. Past performance
is not an indication of future results and past performance should
not be taken as a representation that trends or activities
underlying past performance will continue in the future. The
forward-looking statements in this interim report speak only as at
the date of this interim report and the Company expressly disclaims
any obligation or undertaking to release any updates or revisions
to these forward-looking statements to reflect any change in the
Company's expectations in regard thereto or any change in events,
conditions or circumstances on which any statement is based after
the date of this interim report or to update or to keep current any
other information contained in this interim report or to provide
any additional information in relation to such forward-looking
statements. Undue reliance should not therefore be placed on such
forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR GUGDCRDDDGBX
(END) Dow Jones Newswires
September 23, 2021 02:00 ET (06:00 GMT)
Dfs Furniture (LSE:DFS)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Dfs Furniture (LSE:DFS)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
