Sofa retailer DFS (LON:DFS) reported a fall in sales and pre-tax profits for the six months to 27 January, as the British high-street continues to struggle.
The firm said revenue discounting acquisitions was down by 3.5 per cent to £366.5 million, with profits 58.1 per cent lower, totalling £7 million.
DFS chief executive Ian Filby commented: “We have seen a strengthening trading performance across the first half of the financial year and through February into March.
“We therefore remain confident that, despite the current challenging market conditions, the group will deliver modest growth in EBITDA and generate strong cashflow across this financial year, in line with our expectations.”
An overall boost to group revenues, which hit £396.1 million, up from 379.9m, was attributed to “increasing scale and relative market leadership following the recent acquisition of Sofology”.
DFS acquired the brand for £25 million, as it looks to remain competitive amid an increasingly challenging retail environment.
Neil Wilson, senior market analyst at ETX Capital, commented on the results: “Broadly speaking, DFS is managing to handle the broader downturn in retail pretty well.
“The collapse of Feather & Black, Warren Evans and Multiyork, whose assets DFS has acquired, served to indicate the severe pressure on the market and the opportunity for those with enough scale to see it out.
“As we have noted on several occasions, this company has been here before, coping with recessions and property market downturns that prevent customers splashing out on big ticket items.”
The British high-street has come under pressure in recent years amid falling foot-fall and high inflation levels continue to affect consumer spending.
This comes amid reports that both department store giants House of Fraser and Debenhams (LON:DEB) are struggling after a disappointing Christmas period.
Debenhams shares dropped to 0.29p a share on Wednesday, as concerns continue to mount.
Shares in DFS are trading +8.5 percent as of 9.21AM (GMT), as investors react to the results.