dfs

Shares in furnishing company DFS (LON:DFS) dropped over 5 percent in early trading on Thursday, after profits sunk by 22 percent.

Pre-tax profts for the year to July fell from £64.5 million to £50.1 million, with sales pushing up just 0.9 percent to £762.7 million.

The company blamed the results on a “very challenging” market, with uncertainty in the economy leading to a “significant deterioration in the consumer market”. The weakness of the pound against the dollar also hit profits.

The results come just a few months after the company closed a deal to buy boutique rival Sofology for £25 million. Analysts and investors were positive about the deal, which lifted shares by 4 percent after it was announced.

On Thursday, the company remained positive in the face of its disappointing results, saying it had “excellent” long-term prospects.

Chief executive officer Ian Filby said: “Although group sales will inevitably be affected by the market environment, we have identified opportunities to drive operating efficiencies and reduce financing costs that are expected to deliver near-term benefits, particularly in the second half of the financial year.

“Based on these plans and the current market environment, we would expect to achieve modest, second-half weighted profit growth and good cash generation in the current financial year and we continue to have excellent prospects for the longer term.”

Shares in DFS are currently trading down 4.11 percent at 215.75 (1109GMT).

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