DFS pushes further south: Furniture retailer plans more expansion by TV region

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The Independent Online
THE UPHOLSTERY retailer DFS Furniture, which came to the market last November, is moving further south. It plans to open in Swindon later this year and is looking for sites in Reading and Bristol, writes Heather Connon.

The group plans its expansion by television region, building a significant presence in one area before moving on to the next. It is already strong in the Yorkshire region - where the first store was opened 25 years ago - Central, Granada and Tyne-Tees and is building its presence in the Anglia region. Opening in Swindon would take it into the HTV area for the first time.

Graham Kirkham, chairman and founder, said the group would continue to expand by about three stores a year. He added that the rate was governed more by the need to find and train suitable staff than by availability of sites or finance - it has pounds 16.5m of cash.

DFS also announced results for the six months to January which showed a 47 per cent rise in pre-tax profits to pounds 10m, although that was largely because Mr Kirkham was paid pounds 4.1m in the previous period.

Excluding that, and the costs of the flotation, profits rose 5.5 per cent to pounds 11.5m on sales 28 per cent higher at pounds 66.6m. Earnings per share on the same basis were 7.44p compared with 6.69p, although the reported figure was 6.26p. The interim dividend is 2.3p.

Since the flotation Mr Kirkham's salary has fallen to pounds 200,000, although his 52 per cent stake in the company was worth more than pounds 160m at yesterday's 299p, down 1p, and paid him pounds 1.2m of dividends. He raised pounds 129m through selling 48 per cent of his shares in the float.

The sales increase was partly due to store openings, although like-for- like sales were 8.7 per cent ahead. Stores were opened at Darlington and Nottingham in the first half and one at Sunderland last month.

Jon Massey, chief operating officer, said promotions for store openings - Sunderland had a range of offers and three years interest-free credit - affected profit margins but benefited the absolute figure.