DFS Furniture achieves a record market share in challenging conditions

The group's full year profit before tax is also expected to be in line with market expectations. The group said it had achieved a record market share with an estimated two percentage points increase from its FY22 (full year 2022) position to 38 per cent.

DFS also revealed that cost headwinds are easing and profit margins are expected to improve in the second half of 2023 onwards. It said revenue from continuing operations over the half year was £544.5m which is an increase of 9.4 per cent when compared to the non-Covid disrupted period in 2019.

Tim Stacey, Group Chief Executive Officer said: "I'm pleased to report that the group has extended its long track record of achieving market share gains in a challenging market to what are now record levels. We expect our profit for the year to be between £30m-£35m in line with external expectations.

“The share gains have gone some way to alleviating the impact of the weaker market we have observed in 2022 overall.

"Those gains built throughout the period with the group delivering strong order intake growth in the second quarter. The order intake momentum has continued through the important winter sale period.

“Profit margins have reduced over the last year due to a combination of significant cost increases and our commercial strategy to ensure that we continued to offer great value for customers in an environment where consumer discretionary spend was under pressure.”

Mr Stacey added: “We have however improved our gross margins in the first half of this year from H2 of FY22 (full year 2022) and further still in the second half to date through product innovation and selected retail price increases. Cost headwinds are reducing and in some cases reversing and we expect our upward gross margin trajectory to continue as we execute our margin build back plan.

“At our capital markets day in March 2022 we set out our ambitions to grow revenues to £1.4bn and operate at an 8 per cent+ PBT margin generating post tax free cash flows of 75 per cent+.

"We continue to target that level of financial performance and have solid plans in place to deliver this. Our disciplined approach to investment, data led innovation, entrepreneurial culture, scale advantages and strong operational execution will support a continuation of our long term trend of market share growth."

An interim dividend of 1.5p has been approved by the board reflecting an anticipated 4.5p total full year dividend, subject to the financial performance in the second half of the year.

Two new Sofology showrooms opened over the half year, with the brand now present in 57 locations as DFS continues its national roll-out plan as part of an expansion strategy to boost revenue.