Sofa retailer DFS refinances after strong first half

The sofa retailer refinanced through a £310m bond issue on March 8, which it said has established a more efficient capital structure for the business going forward.

In the half year update, DFS said EBITDA grew due to improved margins as a result of higher sales volumes. The retailer recorded sales up 7.6% to £319.4m.

DFS chief executive Ian Filby said: “This is testimony to the strength of our brand, the effectiveness of our marketing and the success of our expansion strategy, both online and through profitable new store development.”

The business also reported strong cash generation in the period, balancing at £22m, following a £36.5m spend on bond redemption and dividend payment.

DFS invested £1.3m in the growth of the business and it opened three new stores in the period in Stockport, Stirling and Cork. It also relocated its existing store in Cannock. DFS has opened a new store in Westwood Cross, Kent since the end of the period, taking the total store estate to 93 which is in-line with expansion plans. Filby said new stores are “performing well”.

DFS launched its sofa and room planner app in the half year as it further improves its online business.

In addition, DFS signed a long-term contract with a “major UK financial institution” to help it provide interest-free credit for its customers.

Filby added: “We remain confident that we have the right strategy, proposition and team in place to achieve another successful year of progress for DFS.”