Dfs Furniture Share Discussion Threads

[magic] 10/4/2017 13:36

Also in March 31 Times, page 52

Martin Waller, Tempus

Div Yield: 8.3%
Future payments look safe enough.

... It can afford to the special payments and its fairly modest expansion plans.
In the UK, DFS has 108 stores, adding 2 more in the half year another in April and a small one in Crawley.
Growth is also coming from converting warehousing at the stores into selling space and replacing this with distribution centres.

Warning given over the impact of Brexit and the pound in terms of consumer spending and sourcing from Asia. The lower pound will probably reduce gross margins by about 0.5 to 57.8 % . This seems containable and the shares down 2.5 at 250, a touch below flotation price sell on 11 times earnings.
Worth it for the continuing return to investors.

[magic] 03/4/2017 22:47

From November 2016


An entirely routine scenario

Shares of FTSE 250 firm DFS Furniture (LSE: DFS) tumbled 10% when the market opened this morning. This followed news that major shareholder Advent International had halved its stake in the company.

Advent is a big US private equity firm. It bought DFS in 2010 and floated it on the stock market in March 2015. It’s post-float stake in the company was 53.2% and it’s been selling it down ever since: to 38.2% in October 2015, to 24.1% in April this year and to 12.1% with its latest sale.

We’re simply seeing a private equity group doing what private equity groups do. Moving capital out of a mature investment for recycling into new opportunities. It’s an entirely routine scenario. The latest sale was by a placing to institutional investors at 240p a share and the shares are trading at 235p as I’m writing.

With Advent now close to exiting its position, is this a great time to buy? Well, last month DFS posted record results for its financial year ended 30 July and added that trading in the 14 weeks since the Brexit referendum had “not indicated any weakening of demand.”

The company acknowledges that 2017 could be a tougher year but reckons it’s well positioned to “mitigate̶1; economic headwinds thanks to its “resilientR21; business model. If so, it could indeed prove good value today on a trailing price-to-earnings (P/E) ratio of 9.9 and dividend yield of 4.7%.

[magic] 03/4/2017 22:27

interesting sceptical view
worked out better than the comments suggest so far



Signs of continued strain on British shoppers’ spending power would encourage me to switch out of sofa specialist DFS Furniture (LSE: DFS) before the latest financials this week (an interim release is slated for Thursday, 30 March).

So far, DFS has proved resilient since last June’s Brexit vote. The furnishings play announced in February that sales during the six months to January grew at a solid 7%, prompting it to keep its guidance for the full year unchanged.

But retail indicators have become more worrying recently, as Britons buckle down against a backcloth of rising inflation and expectations of toughening economic conditions as we move through 2017.

Sitting uncomfortably

Latest Office of National Statistics numbers, for instance, showed total retail revenues fall 1.4% during the quarter to February, the largest three-month drop since 2010.

And patchy updates from DFS’s competitors in recent months, warning of slowing sales and the likelihood of tough trading conditions persisting, should come as concern to share pickers.

SCS Group advised last week that “trading in February was challenging, largely driven by reduced footfall,” although it added that “we have seen an improvement since the start of March.” And Dunelm Mill warned last month that “market conditions remain challenging” as it also advised of a 1.6% fall in like-for-like sales during July-December.

DFS itself cautioned last month that “in 2017 the retailing of furniture in the UK faces an increased risk of a market slowdown given the uncertain outlook for consumer confidence.” And I believe a similarly cautious statement this week could send investors heading for the hills.

The City expects DFS to suffer a 53% earnings fall in the year to July 2017. And while the number crunchers expect the business to keep the divided locked at 11p per share this year — a figure that yields 4.5% — I believe the dangers associated with the sofa giant far outweigh the potential of such a lucrative reward, and reckon these forecasts could be subject to downgrades as the year progresses.

[aim11] 01/4/2017 09:16

heavy volume last few days, probably some post Advent churn still going on, but hitting up against the 255 resistance many times. Good results, big special on the way in 2 months, i think we break out soon and move towards 280 , that would put the stock on still only 11x forward p/e with an 8% dividend yield

[diku] 30/3/2017 22:37

Has the life long sale ended?

[richard98765] 30/3/2017 22:34

I like the smaller DFS stores in local shopping centres. I visited Bromley and I think it works. They are reinventing themselves with strong covered Divi. I'll top up if I had spare cash

[clivell] 30/3/2017 13:38

Really disappointing- what's not to like??

[aim11] 30/3/2017 11:36

I agree, I don't know what dfs has to do to improve its rating from the bottom of uk retailers...solid numbers, big special which they say is planned to recur in future years. Fx pressure is being managed well and should ease next year. Expansion on track.

[clivell] 30/3/2017 09:55

Great results relatively weak SP

[aim11] 24/3/2017 16:15

I think we have to keep in mind that 25mn shares were placed at 228 only a few weeks ago. That's a lot of stock. Advent definitely disrupted this stock hugely over the last year and it seems like it will take longer to recover as a result. It's allowed us to buy this stock cheap because before brexit and advent sell down this was 350 not 248. Sterling has pressured margins but we already know this. And dwell expansion will help, as well as their online improvement.

[clivell] 24/3/2017 15:58

It's depressing, I expected the share price to rise this week ahead of results next week. It makes me wonder if we might be told something regarding current trade/margins that isn't that good.

[clivell] 22/3/2017 13:16

Big purchase of over 3 million shares at £2.44 - someone is confident !!

[aim11] 20/3/2017 07:30

sterling recovering a bit, oil falling, must be close to a breakout and golden cross on the technicals here too as we approach results

[aim11] 16/3/2017 09:27

at the recent h1 trading update they said h1 lfl was +3.5-4, brokers have negative lfl in for h2, so expectations are quite low. John lewis weekly furniture /home sales have remained strong through to early march, and we should get a special divi announced.

[clivell] 16/3/2017 09:09

SP is treading water until results on 30th March. Definite resistance at £2.50

[aim11] 01/3/2017 19:59

The stock is rated the lowest in European retail, equal to that of debenhams. Homebuilders are soaring, housing transactions especially at low end are being supported by help to buy so positive for sofa purchases, dfs like for likes are still +4 per cent, not zero like dunhelm (yet dunhelm trades on 13x vs dfs on 9.5x). Balance sheet is good they'll do a big special in the next few months. Can anyone explain why its so hated even vs other uk retail?

[aim11] 25/2/2017 15:41

the CDC expansion makes this profit story potentially very interesting in the next year or two. They already talked about this but the market was too focused on brexit and then the advent stock dump.

[dave1975] 22/2/2017 13:45

Growth initiatives seem to be on track. Don't forget last year in the run up to brexit retail suffered. So should be interesting second half of the year.Good luck dyor

[aim11] 22/2/2017 08:39

there's no reason why the free cash can't be close to paid out in full now for dfs, so the dividend yield would be 10% including the special.

[aim11] 22/2/2017 08:37

clivell you are correct, it will all be announced at same time.

[clivell] 10/2/2017 20:39

I thought I read the special divi was going to be announced when the interim are announced.

[deadly] 10/2/2017 18:48

Yes but that was known yesterday and the price was static.

[oldvic] 10/2/2017 12:11

guy on cnbc says special divi to be announced next week !

[deadly] 10/2/2017 08:34

placing at 228 but price shoots to 245p. Crazy times.

[clivell] 10/2/2017 07:05

Maybe now the share price can start to recover?