DFS sitting pretty as profits rise 8.5% to £50.1m

DFS Furniture, Britain's biggest sofa retailer, appeared to be sitting comfortably yesterday despite the current economic downturn, with profits rising strongly and sales remaining solid in September.

"All our key indicators are favourable and I take great comfort from our on-target performance to date," said Lord Kirkham of Old Cantley, the chairman.

Reporting an 8.5 per cent increase in pre-tax profits to £50.1m in the year to 28 July, DFS said trading had remained strong after a "temporary downturn in customer numbers" in the days immediately after the attacks on the US.

Like-for-like sales in the year to July were 4.3 per cent ahead of the same period last year. In the first 10 weeks of this year average order intake is up by 3 per cent, in line with budgets.

Lord Kirkham added: "If it were possible to ignore the international tensions and knock-on domestic concerns I would view the portents to date as very good. However, in the light of the world situation, I think the trading environment is difficult for anyone to predict."

DFS now has 58 stores after opening five in the last financial year. New openings included the group's first stores in Scotland with a branch in Paisley, Glasgow and another in Edinburgh. The plan is for 15-20 new stores over the next three years.

DFS had total cash balances of £97.2m at the year end. The plans is to use the funds for store openings and to buy freehold sites when opportunities arise. The company paid out £20m via a special dividend last year.

Analysts said DFS had benefited from the strong housing market but would be exposed to declining confidence, which could hit high-ticket items like furniture. However, the company said it had performed well in previous slumps, which were more likely to put pressure on smaller competitors. Its shares closed 12p higher at 402.5p.