DFS Furniture comforted by strong showroom sales after lockdown easing

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People could not wait to get back into showrooms once lockdown ended and snap up sofas, according to DFS Furniture PLC (LON:DFS).

In a trading update the company said the ten weeks to the end of June – part of its fourth quarter – sales had jumped 92.1% compared to the same period in 2019 (back in the pre-COVID-19 days).

Its online business boomed during the shop closures, up 222% in the third quarter. But this also reflected its investment in online retail.

Chief executive Tim Stacey said: “Despite short-term supply chain challenges and a macro environment that’s hard to read, we believe the business is well set for growth, to be delivered in both a responsible and sustainable manner.  Given our overall financial position and outlook it is our intention to recommend a full year dividend of 7.5p in September.”

The news has lifted the company’s shares by 13.42% to 308.5p.

Elsewhere outsourcer Mitie Group PLC (LON:MTO) saw customers such as Rolls-Royce and Heathrow cut costs, pushing its full year operating profits down from £86.1mln to £63.4mln.

But the company, which specialises in cleaning, security and technical services, said the outlook for 2022 was materially better than its previous expectations.

The acquisition of Interserve was performing well, and it strengthened its balance sheet with a £190mln rights issue.

Chief executive Phil Bentley said: “”Although COVID has challenged us all, our business has been far more resilient than we originally expected, with revenue, excluding the contribution from Interserve, just 1.6% lower than the prior year.  The second half of the year was significantly better than the first half, with 6.5% year on year growth, as variable projects and discretionary spend works picked up and cleaning and security demand increased. 

“As businesses slowly start to reopen and our customers’ employees return to offices, we are starting to see some green shoots of recovery in the variable project and discretionary spend works and we anticipate this continuing as re-occupation plans solidify.  With some high-quality new contract wins, short-term support to the public sector and additional synergies from the integration of Interserve, we now anticipate 2022 will be materially ahead of our prior expectations.”

Mitie is 5.89% better at 75.92p.

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