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Highlights
- DFS’ group order intake rises 10.2% YoY in FY25, both DFS and Sofology brands gain market share.
- Underlying PBT(A) increases GBP 19.7m to GBP 30.2m; reported PBT reaches GBP 32.9m.
- Net bank debt was reduced by GBP 57.8m to GBP 107.0m; bank leverage improves to 1.4x.
DFS Furniture plc (LSE:DFS), a UK retailer of living room and upholstered furniture, released its preliminary results for the 52 weeks ended 29 June 2025. The company reported growth in order intake, revenue, gross margins, and profits, alongside a reduction in net debt and leverage.
Financial Performance Details
Like-for-like order intake increased 10.2% YoY, with DFS recording 8.7% growth and Sofology 16.2%. Reported order intake rose 8.7%, reflecting the prior 53-week fiscal year. Gross sales increased 5.8% to GBP 1,388.3m, and revenue rose 4.4% to GBP 1,030.3m. Gross margins expanded by 70bps to 56.5%.
Underlying profit before tax and brand amortisation grew GBP 19.7m to GBP 30.2m, slightly above prior guidance of GBP 25m–GBP 29m. Reported PBT improved from a GBP 1.7m loss in FY24 to a GBP 32.9m profit in FY25. Underlying basic EPS rose to 9.2p (FY24: 1.5p), while reported basic EPS increased to 10.5p (FY24: loss of 1.9p).
Underlying finance costs decreased to GBP 38.2m from GBP 41.1m, largely due to free cash flow used to reduce net bank debt. Average funding cost remained around 8% YoY. Non-underlying items included a GBP 4.7m fair value lease adjustment and GBP 0.6m lease guarantee provision release, partly offset by GBP 0.7m restructuring costs and GBP 0.5m land slippage costs.
The tax charge was GBP 8.7m (FY24: GBP 3.0m), with an effective tax rate of 26.4% due to disallowable depreciation.
Balance Sheet and Cash Flow
Free cash flow reached GBP 57.8m, up GBP 72.9m YoY, driven by higher EBITDA, lower interest, and reduced non-underlying charges. Lease liability payments decreased by GBP 3.7m and working capital inflow totaled GBP 24.9m. Net bank debt fell to GBP 107.0m from GBP 164.8m, and ROCE increased to 16.3% from 10.8%.
DFS maintains GBP 250m in debt facilities, including a GBP 200m unsecured RCF and GBP 50m US private placement notes. Covenant ratios remained well within limits, and temporary covenant relief agreed in September 2024 was not utilised.
Capital Allocation
The Group will continue targeting net debt of 0.5x–1.0x trailing 12-month EBITDA, maintain capital investment, and consider dividends when leverage falls below the target. No FY25 dividend was proposed.
Operational Highlights
DFS Furniture’s Cost to Operate programme delivered GBP 25.5m in annual savings, exceeding the GBP 50m cumulative target a year ahead of schedule. Investments continued in vertical integration, exclusive brands, technology, and data platforms to enhance operations and customer experience.
Outlook
Trading in the first 12 weeks of FY26 aligns with expectations. The Board maintains medium-term targets of GBP 1.4bn full-year revenue and 8% PBT, focusing on debt reduction, disciplined investment, and operational efficiency.
