DFS – love the profit granularity...but little else

If you read everything but the first couple of lines of today’s trading update from DFS Furniture (DFS) for its year to the end of June, you might think that everything was kind of workable for the sofa company. Apparently online order intake is up 77% year-on-year between the 23rd March and the 12th July, whilst in the physical showrooms - post re-opening - demand was up 69% between 1st June and 12th July. Sofa frenzy! Of course though, the reality is captured in those first two lines of the update...

#DFS Furniture – FY trading update, notes loss along with “recent trading has been very strong, boosted by latent demand”

#DFS Furniture – completes placing of £64m at 150p per share

Oh come on DFS, we know why you are really raising money...

There is raising money to survive (see the regulatory update today from Aston Martin Lagonda (AML)), there is raising money to underpin growth opportunities (see my write-up on Abcam (ABC) a couple of weeks ago) and there is raising money because you are a cyclical business and need to build a buffer. The latter category is going to be the majority of names which raise money over the next six or twelve months…and this includes sofa company DFS Furniture (DFS), which states today that 'the Company is preparing for a possible non pre-emptive equity issue of up to 19.9% of its existing ordinary share capital'...

#DFS Furniture – “advanced stages of negotiating an additional debt facility” & “preparing for a possible non pre-emptive equity issue”

#DFS Furniture – temporary closures update, notes cash actions including cancelling dividend

#DFS Furniture – H1 adj. EPS -47%, DPS maintained, notes current supply chain & consumer challenges

#DFS Furniture – recent “order intake momentum has strengthened and the key Winter Sale trading period has started satisfactorily”

#DFS Furniture – notes LFL gross sales growth across all brands but mindful of risks of “the volatile political and economic backdrop”

#DFS Furniture – H1 pro-forma revenue +9.9%, DPS maintained, market “particularly challenging”

#DFS Furniture – underlying sales +10%, CFO to retire

#DFS Furniture – FY adj. EPS -25%, DPS maintained, believes currently benefiting from deferred purchases

#DFS warns FY EBITDA will be below forecast and last year after poor Q4 - says outlook "challenging"

DFS - how much cash flow is down the back of its corporate sofa?

Over fifteen years ago I think to remember going to my local DFS (DFS) and really irking the salespeople by paying for my sofa upfront and in full. Clearly I am financial illiterate as I should have taken up the four years free finance and whatever other inducements were thrown at me at the time...but regular readers will know I am no fan of debt at any level.

#DFS Furniture – H1 underlying sales -3.5%, FY financial expectations “remain unchanged”

#DFS Furniture – legal completion of acquisition of Sofology

#DFS Furniture – Competition & Markets Authority clears acquisition of Sofology

DFS Furniture – earnings “at the low end” of a range given less than two months ago...

Following a June profit warning which saw them down to 200p, shares in DFS Furniture (DFS) had recovered to above 230p. They are currently though back below 220p on a “Post-Close Trading Update”…

#DFS Furniture – updates on weaker than expected performance, market “currently very challenging”

#DFS Furniture – acquisition of Sofology Ltd & refinancing