DFS Furniture PLC (LON:DFS) said it expects full-year profit before tax to come in at £105mln after a strong interim performance.
It would be a big improvement after recording an £81mln loss before tax in the year to June 28, 2020.
The furniture retailer expects to reopen its showrooms on April 12 following government guidance and to see a good level of activity in the home market as COVID-19 restrictions ease.
In the 26 weeks to December 29, revenue jumped 17% to £572mln, with digital sales making up 25.7% of the total, from 18.4% in 2019.
Profit before tax surged 56% to £72mln while net debt was cut nearly four-fold to £38mln.
Trading was boosted by strong order intake as a result of pent-up demand from the first lockdown, market share gains and a shift in consumer spending to the home.
House broker Peel Hunt, which retains a ‘buy’ stance, upgraded the price target to 320p from 300p as “the shares should be core holdings in growth and income portfolios”.
“These strong prospects are the outcome of years of investment from DFS into its wide-reaching brands, its omnichannel offer and its uniquely integrated supply chain,” analysts commented.
“That investment won’t stop from this position of strength but even so, DFS is highly cash-generative and a return to the dividend list is around the corner.”
Shares added 8% to 248.7p on Tuesday morning.