DFS says new England lockdown not expected to impact profits

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DFS Furniture PLC (LON:DFS) said new lockdown measures introduced in England on Thursday are not expected to “materially impact” its first half profitability as it said its manufacturing and deliveries are continuing despite the new measures.


In an update on Thursday, the sofa seller said its 169 showrooms in England will be closed until December 2, although its Welsh and Irish showrooms are due to reopen on November 9 and December 1 respectively.


READ: DFS Furniture shares are badly undervalued, reckons Shore Capital


The company also said that its online operation is “performing well” and that based on their previous experience in lockdown they expected the segment to improve further, supported by what it said will be a “temporary transfer of showroom colleagues to other areas of the business, including remotely assisting customers with web purchases”.


DFS added that it has “very strong order bank levels” and that it does not expect the showroom closure to material impact revenues and profitability for the 26 weeks to December 27.


The company also said its balance sheet remains robust with a net cash position and access to over GBP300mln of cash and undrawn bank facilities.


In a note, analysts at house broker Peel Hunt retained their ‘buy’ rating and 300p target price on the stock, saying November was “not a massive month for order intake” and that the large order bank and the ability to keep working through the lockdown ahead of Christmas was “helpful”.


“Any lost store trade will be captured either on Restart 2 or online. Late December is the key to new business, and we should be back to normal retail-wise by then (fingers crossed)”, the broker added.


Shares in DFS were 1.5% lower at 200p in mid-morning trading.

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