DFS Furniture plc (DFS) Q2 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Good morning, everyone, and welcome to the DFS Group 2026 Interim Results presentation. I'm Tim Stacey, Group CEO, and I'm here with Marie Wall, our Interim CFO, and together we will update you on our first-half performance, provide a strategic update, and also a future outlook. Now, there are three key themes that we'll bring out in the presentation today. Firstly, on the financials, Marie will talk to the good result we've achieved in half one and also update you on our FY26 outlook. Second, I'll talk about how we've delivered on our strategy, which has supported our improved performance and delivered on our plan to reduce our debt. And third, in terms of future growth, I see significant growth potential for the business across the medium term. That's revenue and profit growth, which will deliver high levels of free cash flow. So onto our half one performance. In what remains a broadly flat upholstery market, we grew group order intake by 2.3% year on year with both of our retail brands in growth. Gross margin progression continued up 110 basis points year on year, marking our fourth consecutive year of improvement. Combined with discipline cost control, this delivered a significant uplift in profitability. Underlying PBT increased to 31 million, up nearly 14 million year-on-year, demonstrating the operational gearing in our business model. And we achieved the 5% PBT margin we've been targeting outwith any market recovery. Importantly, we also strengthened the balance sheet. Strong cash generation enabled substantial debt reduction, bringing leverage down to 0.8 times, now just within our target range of 0.5 to one times. This enhanced financial flexibility positions us very well for future growth and also allows us to reintroduce a dividend, which Marie will talk ...