Sofa so good —DFS defies retail gloom with sales rising this year

The boss of sofa seller DFS managed to convince the City that things were looking up on Wednesday despite profits halving.

Pre-tax profits fell to £7 million from £16.7 million in the half-year to January 27, while sales rose 4% to £396.1 million. Revenues were boosted by the recent acquisition of smaller rival Sofology as well as failed retailer Multiyork, which DFS bought in December for £1.2 million.

Profits were dented by the one-off costs after its spending spree and the exchange rate.

However, DFS expects a modest growth in underlying profits for the year. Shares were up more than 7%, or 12.8p, to 182.8p.

Chief executive Ian Filby, who is experimenting with smaller store formats, insisted that sales have been on the up in February and March, unharmed by the Beast from the East. He said: “It’s a nice feeling to be among a pocket of winners in the current environment.”

Carpetright, the flooring specialist, is considering a company voluntary arrangement to cut its number of shops and reduce rent, while retailers Toys R Us and Maplin have recently fallen into administration.