DFS Furniture H1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
March 13, 2025

There are 8 speakers on the call.

Operator

So good morning, everyone, and welcome to the DFS Group twenty twenty five Interim Results Presentation.

Operator

I'm Tim Stacy, Group CEO, and I'm here with Marie Wall, our interim CFO. And together, we'll update you on our half one performance. I'll provide a bit of a strategic update and also a future outlook. Marie will come and talk about the financials. So in terms of the introduction, over the last few years, we've been very focused on building compelling customer propositions across our two retail brands, DFS and Sophology, driving significant amounts of new product development, developing a digital first marketing strategy and training our people to be the best salespeople in the industry.

Operator

Now I'll share more detail on these initiatives later, but the combination of our efforts has supported our continued growth in market share, and we're pleased to report today an order intake growth of 10.1 in the first half. We've also focused on our operational execution and continue to make progress here with gross margins up 70 basis points year on year and our cost to operate program achieving GBP 43,000,000 of annualized savings, well on track to meet our GBP 50,000,000 target by the end of FY 'twenty six. Obviously, growing sales, increasing margins and reducing costs has clearly driven profit growth. And profit before tax and brand and wealth ratio has almost doubled to GBP 17,000,000 despite operating in a market that we believe is slightly subdued, down slightly year on year. Our financial position has also strengthened through profit generation and disciplined cash management.

Operator

We've lowered our absolute debt levels, and our leverage has come down from 2.5x at the previous year end to 1.6x as we target getting back into our 0.5x to 1x range. Finally, we remain increasingly confident about the group's prospects and fully stand by the Capital Markets Day targets that we set out three years ago of achieving billion of revenue and an 8% PPT margin. We further strengthened our position as the clear market leader. We're growing profits through our self help initiatives. And in addition, market demand now appears to be slightly stabilizing, and we do fully expect it to recover from the current levels, which are over 20% below pre pandemic volumes.

Operator

Given our high operational leverage, the profit drop through from any market support will be significant. As you know, we have a highly cash generative model, and so we expect to delever back into our target range over time, freeing up cash flow for further growth initiatives and healthy levels of returns. Just moving on to some brief additional headlines. Both of our retail brands performed well in the period ahead of the market. DFS' order intake was up 8% year on year, supported by its exclusive brand partnership sales, which reached a record high in the period, representing over 40% of total sales.

Operator

The Sophology brand has performed incredibly well in the period with order intake up 19% year on year and the range changes that we made at the end of the last financial year are proving very effective. Our customer proposition and operations are in excellent shape and NPS scores are either at record levels or very close to reflecting all the effort of our teams across all aspects of our customer journey. Our sofa delivery company in particular is performing better than ever and achieved post delivery net promoter scores up 10% year on year, reaching record highs. So in summary, a really strong half with significant profit growth achieved and our customer propositions and our operations are well achieved. So I'll now pass over to Marie to cover the

Speaker 1

Thank you, Tim. Hi. Thank you, Tim. Good morning, everyone. It's a pleasure to be here today.

Speaker 1

I'm going to begin by walking you through our key financial headlines starting with order intake. We've achieved strong order intake growth of 10.1% in a market that has been subdued. Our proprietary banking data indicates both our brands grew their market share in the period. Gross sales, which are recognized on delivery of orders to customers were up to a lesser extent at 1.4% year on year. This is largely due to the improved order intake being back weighted during the period and therefore the goods have not been manufactured, delivered and recognized as income in the period.

Speaker 1

Consequently, this leaves us with a healthy order bank heading into the second half of the year. Revenue growth meanwhile came in broadly flat reflecting the decision we made to increase the use of forty eight months interest free credit to drive consumer demand in a weaker market. More on this later. In terms of profit, our underlying profit before tax and brand amortization of million is up million year on year. This improvement is primarily driven by the success of our cost to operate program, with stronger gross margins and ongoing operating cost reductions achieved.

Speaker 1

Our underlying basic earnings per share of 5.3p is up on last year and this is consistent with the year on year profit performance. Reported profit forecast of million includes brand amortization charges and million of non underlying charges related to our cost to operate initiatives. These are primarily restructuring. Finally, our closing net bank debt stands at million, down from million at the same point last year. It represents a significant reduction from million at the full year 'twenty four year end.

Speaker 1

Now this decrease is the result of continued cash discipline with our leverage reducing from a peak of 2.5 times at full year 'twenty four year end to 1.6 times. Moving on to our sales performance. And as I mentioned earlier, the group's order intake performance was driven by strong contributions from both DFS and Sifology. Now Tim is going to elaborate on that a little bit later in the presentation, but as you can see, DFS has grown at 7.8% and Pathology by 19.1%. You can see in the table that both brands reported year on year gross sales growth is around 10 percentage points lower than the growth in order intake.

Speaker 1

And as I said earlier, this is due to our trading performance strengthening through the half, which means that the majority of the order intake growth in half one will be recognized in the P and L in the second half. In terms of revenue, our year on year performance was broadly flat and that is despite the market being in decline. Revenue grew to a lesser extent than gross sales as a result of our effective strategy to invest in DFS's interest free credit proposition. It's also worth highlighting that whilst Bank of England base rates over the half year on year have been relatively flat, the cost of providing interest free credit has increased significantly for the group over the last few years. As you're all aware, interest rates have recently started to reduce and it's worth highlighting that for every one percentage point movement in the base rate, our interest free credit costs will reduce by approximately 7,000,000 to 8,000,000 sterling on an annualized basis and with any changes to the Bank of England base rate typically impacting our interest free credit rates with a three to four month delay.

Speaker 1

In summary then, a strong order intake performance in a market that we believe was in decline. Now on to our cost of upgrade program, and I'm pleased to report that the momentum from last year has continued into the first half of this financial year. At the end of FY 'twenty three, we set ourselves a target of 50,000,000 of annualized savings by the end of full year 'twenty six. We've achieved 43,000,000 of that target today with 15,000,000 delivered in the first half, and that is on top of the 27,500,000.0 we delivered in FY '20 '4. Our gross margin as a percentage of revenue has continued to improve.

Speaker 1

And last year, we took the decision to close one of our manufacturing sites and wood mills, which has enabled us to redistribute the production of our sofas across our remaining two factories and our third party locations. Now this has both reduced costs and improved quality through ensuring we're making the products in the optimal locations. On the operating cost side, we delivered savings through the annualization of FY 2024 initiatives such as developing more efficient operating models across our showroom and online sales teams and also within our logistics operations. In addition, we've implemented new cost saving measures in the first half of this year, such as through aligning payment solution suppliers across our two retail brands and also improving the efficiency of our customer service operations. The efficiencies coming through from the sofa delivery company are a real standout and is something that Tim will elaborate on later.

Speaker 1

As a result of this program, we are developing an ever increasing cost conscious culture across all areas of the group using data and MI through the development and effective use of dashboards to obtain insight and improve decision making in our operations. Our cost savings have been achieved in a sustainable manner and without compromising the customer proposition. And Tim's gonna bring this to life later, but he talks to our strong NPS stores. Overall, we're very pleased with the progress we've made so far. The group is now operating at a lower cost, which will strengthen future profitability through all stages of the economic cycle.

Speaker 1

So with the pipeline of opportunities we have, we're confident we will achieve the million sterling target set in FY 'twenty three, and these savings will help us to mitigate future inflationary pressures, which include the recent changes to Employer National Insurance contributions, which have an annualized impact of million to the group. Moving on to gross margin, and we're pleased with the progress we've made here, both in terms of the cash margin, which you can see is up GBP 3,300,000.0 year on year on the chart, and also the margin rate, which has increased 70 basis points to 56.7%. This is a significant step forward as we continue to make progress towards our 58 margin target, which we first set out at our twenty twenty two Capital Markets Day. Margin expansion is driven by improvements in product margin, reflecting both the strength of our commercial proposition and our continued focus on cost of goods under the cost to operate program. These, together with favorable FX, more than mitigate the headwinds we've seen on freight rates.

Speaker 1

Now just a note on freight rates. These were notably higher in the half, broadly double the $1,500 per container rate from the prior year, with last year's rate being more in line with the long term average. We're starting to see freight rates come down. It's worth noting that every $1,000 change in the cost per container equates to approximately 7,000,000 to 8,000,000 on the group. We remain confident in our ability to achieve our 58% gross margin target and there are further opportunities to reduce our cost of goods through improved purchasing with future anticipated interest rate reductions providing further margin support through lower interest free credit costs.

Speaker 1

Now turning to operating costs. And as I mentioned earlier, we've made good progress here, both in reducing our cost base and in building momentum in FY 2024. Our total operating costs, depreciation and interest, have reduced by million year on year. Now this is despite million of inflationary headwinds, which we've more than offset to the cost savings achieved by our cost to operate program. The gross sales increase in the period has been largely driven by average order value increases with the stronger order intake volumes in Q2 to feed into the second half P and L.

Speaker 1

And as such, variable costs have been broadly flat year on year. Now I've already talked about the key areas of cost savings, but one further point worth mentioning is our use of data and customer segmentation to improve marketing efficiency. And as a result, we've been able to keep marketing costs flat across the half and offset inflation. Looking ahead, through our ongoing cost to operate program, we have a pipeline of opportunities that will enable us to run the business even more efficiently in the future. Turning to cash flow.

Speaker 1

Free cash flow in the period was GBP 48,200,000.0 representing an increase of GBP 37,600,000.0 against last year. The strong performance was driven by improved profit, lower capital expenditure and tax payments and most significantly, working capital inflows. Taking each in turn, cash capital expenditure reduced to 10,400,000.0 as we continue to prioritize spending on attaining our existing assets and investing in capital light, short payback growth opportunities. We also expect total cash investment for the full year to remain within our previously guided range of million to million. Interest and tax reduced by GBP 5,800,000.0 year on year to GBP 5,600,000.0.

Speaker 1

Interest costs were GBP 2,400,000.0 lower year on year, primarily due to the non recurrence of the refinancing fees that we incurred in full year 'twenty four, and corporation tax paid million lower year on year due to the in half utilization of historical overpayments. Lease liabilities increased to million, reflecting additional payments which fell into half one as a result of our period end date falling five calendar days later this year. Total working capital inflows increased by million year on year to million in the period. This was driven by a negative working capital model and reflects a higher trade creditor position linked to higher delivered gross sales and increased customer deposits held as a result of the stronger trading performance. There is also some additional benefit from deposits taken in the additional peak trading days up until the December 29.

Speaker 1

Now we do expect to see a partial reversal of this working capital position as the order balance on customer deposits normalized by the end of the year. And in summary, the business remains highly cash generative, and we expect to generate strong cash inflows and continue to reduce our leverage. But let's take a look at how all of this translates into an improving financial position. We've shown three charts on the slide to show how net debt and our key ratios of leverage and fixed charge cover have evolved to twenty twenty two. Taking each of these in turn, closing net debt stands at $116,700,000 down from a recent peak of $164,800,000 at the end of FY 2024.

Speaker 1

Now this reduction is significant and it brings us well below the pre COVID average level of debt that we operated with as shown in the top chart. We also have plenty of cash headwind relative to our total lending facility of $250,000,000 sterling. As a result of the stronger profit performance over the last twelve months and the lower net bank debt, our leverage has improved to 1.6 times, which is down from the FY 'twenty four year end position of 2.5 times. Fixed charge cover has also improved to 1.7 times as I show on the bottom chart. Looking ahead, it is the priority to reduce leverage further and return to a target range of point five to one times over the medium term.

Speaker 1

In December 2024, we also successfully ascended the group's revolving credit facility by a further sixteen months now secured until January 2029. The group now has a 200,000,000 revolving credit facility secured until September 27 and 175,000,000 until January 29. Additionally, we have 50,000,000 in loan notes maturing in two equal tranches in September 28 and September 2030. These extended facilities provide us with sufficient liquidity for the foreseeable future whilst also laying a solid foundation for growth and financial flexibility. So moving on to capital allocation.

Speaker 1

And whilst we've made good progress on reducing net debt and leverage, we recognize there is still more work to be done. And we thought it would be helpful to summarize our approach to capital allocation in light of this. So in the near term, we expect to remain outside of our target leverage range of 0.5 to one times. However, deleveraging remains a high priority. And to support this, we will continue to take a disciplined approach to cash management, focusing on maintenance CapEx and selective capital light short payback growth opportunities to ensure we balance investment for growth with maintaining flexibility.

Speaker 1

We also remain fully committed to delivering sustainable shareholder returns, but given our current leverage level, the board has declared decided not to declare an interim dividend, and this decision reflects our focus on strengthening the balance sheet in the near term. The decision on the FY 'twenty five final dividend will be based on full year performance, net debt position, and the outlook at that time. In summary, I'm pleased to be announcing a strong set of numbers for my first set of results with the group having made a good start to half two with a strong order book and our continued focus on improving our cost base, we are well positioned for the future. And with a smile on my face, I will now hand back over to Tim.

Operator

That's good to see. All right. Thanks, Marie. So I want to just start off briefly by talking about the state of the market as we see it. The top left chart here illustrates our market share by value as based on the global data survey.

Operator

And this shows that the group is the largest business in The UK upholstery sector by some way with 36% market share by value. We're over three times the size of our nearest competitor. So this provides us with significant scale benefits across our business and you'll hear about that more in the following slides. There is still a material fragmented tail in the market, which makes up about 25% of it. It's made up of independent chains, small businesses, and some of the generalist retailers.

Operator

And in terms of some of the competitor movements within there, now we know that some of the generalists have entered into the sector, and they may have taken share from some of the some of our specialist competitors. But as for the independents, they've been in decline for a long period of time now, and we continue to see them as a donor category to our business. See in the middle chart how our share has evolved across our specialist competitor set on a monthly basis, and this is using our proprietary Lloyds Banking data. We have a track record of growing share across all economic cycles, and over the last twelve months in particular, we've made significant progress. Finally, on the chart on the right hand side is the market size over the last few years.

Operator

And the key point to pull out from here is that, under the year '24, adjusting for price inflation was at its lowest point with volumes at 20% below pre pandemic averages. We know this. However, we do expect the market to recover in time. There's a number of reasons for that. Firstly, there are more rooms in UK households than ever before with sofas in them, and at some point, these will need replacing.

Operator

Secondly, we know that consumer confidence is a big driver of sofa replacements, and confidence levels recently have stabilized. Now given that household savings are in growth, as consumers become more confident, we believe that they'll be more willing and able to spend on big ticket items. And finally, housing transactions have been in growth for the last ten months, and housing transactions drive around 20% of our market. And these recent growth in transactions will provide a nice tailwind going forward into the future. So turning to profit growth and staying at the highest level here, we see three key areas to drive profit growth for this business.

Operator

The first is focusing on what we can control, and that builds on the successes over the last few years and especially in the first half that you've seen to improve our own profitability, specifically growing profitability through like for like sales and also the clear white space in front of us to increase the Sophology showroom estate by up to 15 new showrooms, and that's a 25% increase on the estate today. In addition, as Marie pointed out, we've got an opportunity to grow our margin by 130 basis points by targeting improved sourcing and also looking to the benefit of falling Bank of England base rates. And we'll continue to optimize our cost base to offset future inflation. Secondly, as I said earlier, market volumes are below 20% below pre pandemic levels and we do expect that market to recover. The good thing is that we do have the capacity across our business to handle much higher volumes without adding in further structural costs.

Operator

And particularly as the costs that we've taken out recently, that's improved our operational leverage, which should enable a profit drop through at an incremental rate of 40% at the end of incremental revenue. Now that should convert to cash at a healthy rate of over 75% of PBT given the relatively low maintenance capital requirements and our negative working capital model. We also have growth opportunities beyond the core upholstery business. We have a great asset in the sofa delivery company, and we see opportunities to leverage that in the future and more on that shortly. We're also targeting to grow our share in the non upholstery Home segment from 1% to 4%, first starting in the billion beds and mattress segment.

Operator

Now we've laid down all of the infrastructure to support our growth in this area, and we've utilized some of our exclusive brand partnerships to sell branded beds. Going forwards, we should be in a position to start to market this and build customer awareness and drive sales and profit. Just moving on to our particular sector in Sofas. So moving on to our winning integrated retail proposition, and we believe that having this sort of business model is absolutely critical for our particular category. So we know from the results of our biannual surveys covering 3,000 people who are in market for a sofa that around 90% of customers will start their journey by researching online, and 85% of those customers will require the all important sick test before being willing to commit to a sofa purchase.

Operator

After all, on average, customers retain their sofas for around seven years, so it's a decision you don't wanna get wrong. Now we have two complementary retail propositions that are set up to meet these customer needs. To start with, we have well invested digital assets from our website to being the first sofa retailer to offer augmented reality visualization of sofas through a mobile device. We have the marketing power and scale to be able to invest and stay ahead of our competitors. And we have high levels of brand awareness with DFS, for example, being the most searched for term in our sector on Google versus sofa.

Operator

As for the all important SIP tests, we have good geographical spread across our two retail brands. DFS has full representation with showrooms across The UK and Ireland. And Sophology, as we open the 15 more stores I mentioned, will also be in a strong position. We continue to invest and maintain our assets to high standards, creating a welcome and inspiring space for our customers to showcase the fantastic products to levels that competitors can't match. And this results in sales densities of around three times that of our nearest competitor.

Operator

Finally, in this day and age, we provide the ability for customers to transact in a way that best suits them. This includes, for example, our shared baskets in BFS that enable our sales colleagues to build an order in the showroom, and then the customer can go home and complete at their leisure. So to sum up, with a well invested base asset base across our digital and physical channels, we'll continue to invest in that to innovate and evolve, and this resonates really well with the customer journey in this space. Again, staying at the highest level into design inspiration and selling, and I think we've been fantastically blessed to have some great designers in our business, and we source from the biggest suppliers around the world. And this allows us to innovate with our products and have the best ranges in the sector.

Operator

Due to our scale, we can attract and work with well recognized brand names such as French Connection, Jewels, Ted Baker, Country Living, House Beautiful, and Grand Designs. And these brands carry a lot of weight with The UK customer, And we work with these brands on an exclusive basis to provide a competitive advantage. In addition to adding to our exclusive brands portfolio, we've continued to innovate in our products. We've introduced more technology than ever before into our sofas, such as wireless charging points, wine coolers, speakers, vibrating seats, and recently, we've patented heated seats, all of which are driving up average order values. We've been investing in data across the organization the last few years to drive improved decision making.

Operator

Our data driven marketing approach enables us to market at highly localized levels in a very efficient and effective way. Recently, we've won the Bloomreach Data Driven Leader Award, recognizing our impactful use of customer data and analytics. And the teams in house have been nominated for four UK Search Awards for best use of search, best in house team. Now we've always been creative from an above the line point of view, and recently, our digital first execution of the recent BFS advert has been used as an internal case study at YouTube for effective platform and digital first creative thinking. Finally, we believe that our highly trained and motivated sales colleagues are the best in the business and I'd like to thank them for their efforts over these last few months.

Operator

We developed a good mix of full time and part time colleagues which allows us to flex our deployment based on footfall and data. We focus on matching our colleague profiles to the towns and cities they serve and all of this drives conversion and NPS. At the end of the first half, we made a change in our organizational structure with the introduction of some additional group functions, including buying and marketing. We believe that this will further drive synergy benefits through facilitating knowledge sharing and embedding best practice across the group. Now moving on to moving on to DFS, our longest and established brand whose core target market is mid income families.

Operator

DFS achieved order intake growth of 7.8% in the period, principally due to higher average order values, which were up 4%. The AOV growth has been driven through new product developments, especially, as I said before, in our higher price exclusive brand ranges, overall reached a record high of over 40% in participation. In the period, we also launched exclusive ranges from our new partner, La Z Boy, who are worldwide famous for comfort, and they're trading well. Along with this, you'll see the guy in the middle here. We've enlisted a basketball icon and fellow Nottingham Forest fan, Shaquille O'Neal, that's true, as our brand ambassador for our market leading range of reclining furniture.

Operator

And we're really excited to be working with him, especially on social media where he's a huge presence. And we hope to replicate the success that he's brought in The US in a very similar role with other furniture retailers. We've also invested, as Marie said, in peers of four years interest free credit to stimulate demand and enable customers to trade up to higher price point ranges. Our DFS core values of think customer, be real, and aim high are fully embedded across the teams and across the business in terms of our mindset. And I'm really proud to see our colleagues living these values day in, day out.

Operator

And their efforts are feeding through into very strong post purchase net promoter scores for the period, which were close to the all time record highs that we've seen in the last few years. Moving on to Sophology, which targets slightly older and more affluent as my demographic. Now, CYPHOLOGY has had a very strong first half. You may remember in our last full year results that we talked about making significant change in the range in quarter four of last year. And so far, we've changed around 75 of the ranges.

Operator

And this new proposition has landed very well with the customer evidenced by the 19% year on year order in the period. In addition to the new ranges, Sophology's merchandising has also been elevated. A good example of this in our showrooms is where we have the new Paramount recliner sofas, which are housed in inspirational home cinema room sets with sofa speakers connected via Bluetooth and large screen TVs, and we even provide free popcorn to give you the full cinema experience. We've introduced promotional activations, such as limited editions and introductory pricing to drive conversion both in stores and online. And finally, post purchase MBS stores, like DFS were strong, again, close to record highs.

Operator

Now onto our platforms. Firstly, sourcing and manufacturing. Now our objective across sourcing and manufacturing is to produce goods at the best cost and quality that enables us to offer the best value for money to our customers whatever the specification. We're proud to operate two of our own factories in The UK and have strong relationships with some of the largest manufacturers in the world. Operating our own factories provides us with a number of benefits.

Operator

First, we know how much it costs to produce and transport sofas. With this knowledge, we know exactly what's optimal to manufacture ourselves and what to outsource. It also helps us with our supplier negotiations. Second, we can offer shorter lead times to customers than those that are sourced from overseas, something that's a competitive advantage, particularly at certain times of the year such as I've been in the run up to Christmas. Our scale and strong relationships with our third party suppliers enable us to obtain products at the optimal cost.

Operator

And through our use of data, we continue to work with our suppliers to identify things that are the causes of defects, to improve quality, and reduce the cost of repair. And we're seeing this, come through in terms of benefits. And our established customer net promoter scores, which are taken six months after purchase, are at record highs. As Marie mentioned earlier, our sourcing and manufacturing strategy has contributed to growing our gross margin 70 basis points year on year. And with the brand operational changes I alluded to earlier, we hope this will facilitate us further leveraging the group's buying scale and support us in reaching our 58% gross margin target.

Operator

Moving on to logistics. The sofa delivery company, as you know, was formed by bringing together the logistics arms of DFS and the SoFarge brands to form the largest two person sofa delivery network in The UK, providing a first class delivery and installation service. With national coverage and a seven day operation combined with the group's scale, we utilize cutting edge technology such as AI driven vehicle routing scheduling and data rich KPI dashboards, all of which combine a sofa delivery company to offer the lowest cost per order in the market and provide the highest levels of service. Now These are seen in the post delivery NPS scores, which are at record highs, and the cost base, the cost per order is reduced by 4% year on year despite cost inflation. With capacity available in the network and our anticipated volume recovery, we expect to see further operating leverage benefits in Sofia delivery company in the future.

Operator

In short, Sofia delivery company goes from strength to strength, and we're super proud of it. Now onto our people. Our people are the group's most important asset, and we want to offer an environment for colleagues to develop and progress. Our popular leadership academies offer opportunities for colleague development across various subjects, helping us to strengthen our business leaders and future leaders. Sessions have been delivered to over three fifty colleagues in the period with modules focusing on sustainability and data proving especially popular.

Operator

Now creating a great place to work where everyone feels welcome and could be at their best is crucial to our future success. And to that end, we've created six colleague networks, which help us unite like minded people and enable us to become a more inclusive group. Each of our networks has senior leader representation, helping us activate change and engagement initiatives across our growing communities. We are constantly seeking to raise standards and last year we achieved the accreditation in the Inclusive Employers Standard. Onto sustainability, we've made good progress on our commitments where we established the SOFA cycle framework back in 2020.

Operator

We are constantly trying to develop our ambition to become a circular business. We obtained validation from the science based targets initiatives of our near term emissions reduction target, underpinning our commitment to minimize our environmental impact. Given that our scope our emissions are weighted to Scope three, it's crucial that our partners are aligned with our ambitions. And I'm pleased to say that we've secured commitments from our partners to develop their own science based net zero plans covering 59% of our Scope three emissions. Our scale is significant enough for us to be a driving force in this sector and through a collaborative approach with our suppliers we are working to ensure responsible and sustainable use of materials through transparency and traceability And in the period, we're pleased to confirm that all of our Tier two and three suppliers are now leather working group certified, setting important standards, including to ensure our products, for example, are not contributing towards further deforestation.

Operator

Right. Moving on to outlook. So, our profit expectations for the full year have increased And trading in the second half, I'm pleased to say, has remained strong. And we've actually ordering take increasing from the 10% that we achieved in half one. Our year to date ordering day, as of Sunday, is 11% year on year following a record winter sale at DFS and continued strong performance in Sophology.

Operator

Now looking forward, we are starting to trade against our strongest period last year in quarter four, which was 6% up. So we don't necessarily expect this 11% to continue for the rest of the year. That outperformance is better than we expected and is a testament to the customer positions we developed, our operational execution and the super hard work of our people for which we're incredibly thankful. Now assuming lead times remain extended due to the Red Sea closure and that we experience no further supply chain disruption, we do expect to deliver full year underlying profit before tax brand amortization above previous analyst consensus in the range of 25,000,000 to 29,000,000. Just looking ahead and briefly looking ahead here, looking at some of the market drivers.

Operator

And I think our view would be that they're stabilizing or slightly trending in the right direction. Starting with consumer confidence, you all know, they are slightly below pandemic, but you can see the trend is on the up. And that's encouraging given that 80% of our business is driven by replacement. Property transactions, the middle chart, they've been in growth now for the last ten months, and we expect this to feed through as a nice tailwind as those purchases get completed. Finally, look on the right hand side, looking at household disposable incomes, and these look to be at an inflection point with the OBR forecasting return to growth.

Operator

In addition, the Astor disposable income tracker indicates as of January households in three of 13 regions now have spending power higher than pre pandemic levels. We know that savings rates are also particularly high. So in summary, there are starting to be reasons that this market will recover, although don't ask me, which I'm sure you will do in a minute, when. So last couple of slides now. I think this one's important.

Operator

This kind of is the audit trail back to the March 22 Capital Markets Day. And we set out targets back then of 1,400,000,000 of revenue and an 8% PBT margin. Now it's just after that time, that the cost of living crisis started and interest rates started to increase, cost inflation flowed through. And as we've said before, the upholstery market did contract significantly. And I think this is illustrative.

Operator

Without action, with a market decline of over 20%, base rates going from less than 1% to 5% and cost inflation, we would have been in a difficult position making a loss of around 6% if you just took the numbers in this year. But we've been working hard on self help for the last three years and that's the middle box. We've set out back in 2022 to gain market share in the sulphur market and we've done that. We've achieved over three percentage points market share gains and that's mitigated some the sales loss. I think you've seen in the cost to operate program something in the region of 43,000,000 delivered to try and offset base rates and the higher inflation, and that's enabled us to get to a reported margin of 3% in half one.

Operator

Now looking forward, resetting and saying this is now going forward into the medium term, we do expect to deliver on our target 58% gross margins. There's a few things going in our favor, and with us Bank of England interest rates or the freight rates normalizing, but also we have a lot of help ahead of us in terms of cost of goods. So that's a target that we remain committed to, and we've still got more work to do on costs to get to our 50,000,000 target. And if we start to see market recovery, and grow our top line, given our market share now and the operating leverage that we have having taken out all this cost, any revenue growth will drop through at 40%. And that'll give us a really accretive margin.

Operator

So we're therefore very confident we can deliver the eight percent PBT margin in the medium term. Please know I'm gonna conclude now. So look, I guess, you know, standing back, we're all very aware of the geopolitical uncertainties and the varying views on The UK economy and what's gonna happen in April. But despite all that, what we know is that we've had a good half by focusing on the things that we can control. We've grown our market share.

Operator

We've improved our gross margins for the fifth consecutive half. We've reduced costs and therefore increased profitability, and that, you know, enables our financial position to improve, obviously, reduce debt, and that's our focus for the next couple of years to bring the gearing down. I'm pleased to say that the second half has started really well, and therefore, we've increased our profit in, the year expectations for the year. Standing back from my position, having been here fourteen years, our customer positions have never been stronger. Our operations are in great shape.

Operator

Our customer scores are amazing. Our colleagues are really fired up. And it's nice to see the market stabilizing. I wouldn't say growing, but stabilizing. And therefore, we're confident with a bit of the market recovering.

Operator

We're confident in the medium term and the targets we set out before. So that concludes our presentation. I'll now invite Marie back up and so we can start the q and a. Thank you. And if you can hear your microphone.

Speaker 2

Shout if you like. I can shout about that voice. So let me be the one to ask about market recovery because I think the BRC referenced furniture back in growth in February, and we've seen a bit of recovery in the Barclaycard data as well. So just wondering if you're seeing that as well, and, you know, what the trend was through the current trading period. Also, if you could talk about how DFS performed, relative to Sophology through that period in a bit more detail.

Speaker 2

Should I ask the second question as well? Yeah. You go. So just wondering, if you're thinking about integrating Sophology more within the business, you know, for example, in terms of the design and, you know, when that might be, what the time scale might be for that.

Operator

Yeah. What we're seeing from a market point of view from the Lloyd's data, which is real cash transactions month on month, it's been slightly in decline for the last seven months of this financial year, eight months of this financial year so far. So we're not seeing an increase yet. That said, we're seeing some footfall increases in half two, so 2% or 3% up. And we're seeing web traffic come back a little bit, so increasing there as well.

Operator

So I think what the sort of sales growth that we've seen, so of that 10% that we quoted, about 5% is volume growth and 5% is average order value growth. So I think, therefore, we're outperforming the the volumes within the market. So there's a gen a really gentle increase. And I think it's difficult to extrapolate having been here a while because we do ebb and flow that now we've got a good trend of probably from quarter four last year, which was plus six, and then the thirty six weeks of this year plus 11. That's nearly a a year of decent growth in a fairly stable ish market.

Operator

So I'm not gonna call the bottom, but there's some there's some green shoots there. That makes sense. Within that, DFS has performed really well. Volume growth as well, a bit lower than the 5%. Average order value growth four and a half, 5%.

Operator

The sophology, since we've done the range transformation, we started in about this time last year. That's really powered forward, and that trend has continued. That's really driven by volume, not value. So we've reset a lot of the pricing to be a bit more attainable. Still still higher price points than DFS, but the value for many perceptions and sophology have improved dramatically, and the conversions improved on the back of that.

Operator

So it's really about conversion and average order value rather than footfall and the market change, if that makes sense. In terms of integrating Sophology, we did all of the back office pieces, so the people team, the technology, finance team a few years ago. What we're now doing is we've started to join together the commercial teams, the buying teams, and the marketing teams. And so that that work is underway. But that's what's really important is we're keeping the brands very distinct so that the retail teams are separate, run by separate teams because they are complementary.

Operator

You know, we get very little crossover, so we need to make sure we pull them apart there, but get the better buying synergies if we can and share the best practice across marketing. The DFS Digital team is off the scale good, that's just my opinion. But they're getting nominated for lots of awards. And so I think, can we use some of that, ability, plug that into Sophology? And that's that's starting to work already.

Operator

The Sophology brand teams are brand marketing teams are really strong. How do we get the operations working even better together? So that's as far as we we want to go on that.

Speaker 2

And just a really quick one. Sorry. Follow-up. What goes on design and manufacturing?

Operator

Yeah. So on design so we we we use common suppliers across most most of our ranges. And what we've got is some of our our own designers designing ranges for sophology made in our own factories. So and they're in the top 10 products and amazing products that our design teams, you know, showed you around the design studio. It's phenomenal.

Operator

It's full of great innovation. And so we we're very clear about what the sophology handwriting is, do that with our own designers, and that may be made in our own factories or our supply partners. Jonathan?

Speaker 3

Morning, all. Fair for me. Firstly, on IFC, just just, perhaps another level of granularity on its use as a a competitive tool and and has that increases a percentage of sales recently. On the 58%, you mentioned it half a dozen times in the presentation. Is is that because you think it's the right answer for the dream p and l?

Speaker 3

Or is that just another sort of stop along the way? And and and if you did, you know, god willing, the the tailwinds get you to 58 and then there was more beyond that. Would you reinvest that or I bet it's the same question asked twice. And then lots of good stuff about people, investment in people, etcetera, as as staff turnover rates responded to that accordingly.

Operator

Yeah. Good questions. Will you take the margin on? Give me a bit of time to think about the answer to that because that's a good question. On IFC, I think, obviously, it's about 60% of our business goes through IFC and 40% cash.

Operator

That hasn't really changed that much when we've done the forty eight months. So what you see is the people who are you people who spend on, IFC, their average order value is a lot higher because we can trade people into those models, models I talked about before, the models, etcetera. So we see we see strong growth in I in in AOV. What you also see is it drives conversion. So customers because it you're still in a cost of living crisis, still middle income families.

Operator

You know, actually helps them afford it, and it's a really good offer at naught percent. So why wouldn't you in a in an interest rate environment that's, yeah, four or 5%? So so the the penetration hasn't changed, Jonathan. It's just driving conversion relative probably to the competition, particularly in in DFS. It's a really good tool.

Operator

It's still on for another eight days or so, and we'll probably pulse it at certain times. At key trading times, it won't be always on. As interest rates fall, hopefully, in the next year, eighteen months, that will help it become even more affordable and would help us with the margin that Maria will talk about in a second. Just in terms of the people side of things, actually, I'm pleased to say attrition's at probably the lowest levels we've seen for a very, very long time. We went through quite a lot of restructuring in the last couple of years, part of our cost to operate program.

Operator

We had to let colleagues go, which was very, very tough decisions. You know, those factories have been around for a long time. A lot of people have been there twenty five years plus. So we've done a lot of that now. We want to have a period of settled time and investing our people.

Operator

A lot of leadership development stuff we do. A lot of data stuff we do. And we're really proud of that. In fact, some people in this room have come to some of those academies and have presented to them. So, yes, staff turnover's as low as it's been, and we've got some great people coming through the business.

Operator

I would say that. But we we'll just put about margin going to 58 and then how we Yeah. Should we go further?

Speaker 1

I think it's a really good question, Jonathan. So, in terms of, where we are at the moment, we're at 56.7%. I think you heard Tim talk about the biggest progress that we've made over recent halves in terms of our focus on self help and looking at gross margin in the round. If freight rates were just to become a bit more normalized from where they are at the moment, that would get us another point. So it gets us more towards 57.7%.

Speaker 1

And if we saw Bank of England base rates go again tick down to about 3.5% to 4%, that would get us to the 58% and that's almost notwithstanding any of the self help work that we're doing both in terms of looking at our product mix, our sourcing strategy and then other initiatives as we just think about the customer proposition in total. So practice we'd need to make the right decision at the time, taking into account what we're seeing in terms of the market, the competition and what we thought was right for the consumer. And I think we'd probably have a look at that soon and then decide where we'd want to set it over and above.

Operator

Yeah. If you went back 10, Jonathan, and said pre pandemic, the average was around $57.58. And I think if you get towards, you know, you could say, oh, well, mathematically, we get to 60. But in the end, in the real world, this business is quite elastic in pricing. So I think if you start to get into those high levels of margins, the competition gets stronger.

Operator

We're seeing that with some of the big competitors. So I think we just have to let's get structured to 58% and then we'll have that conversation.

Speaker 4

Wayne? Just a couple for me. Just with regards to new store openings,

Operator

it'd be good to

Speaker 4

get an idea where you think the greenfield opportunities are. And then looking at the map, it looks like Ireland is relatively under populated. So just a flavor on that would be helpful. And then just a little bit more on the market as far as the customer demographics, have you seen a change in maybe the customer mix? Because clearly, the performance of

Operator

the two

Speaker 4

brands are very strong, but very strong in SOFOLOGY and you've obviously had a range change there. Are you pulling in different types of customers in relation to potentially lower income versus middle income and maybe higher price points? It would be helpful to answer that.

Operator

Good question. So I think in terms of new store openings on Sophology, we obviously, we've got the data from the DFS estate going back. So we know where all the best cities are to be and all the best parks are to be. And therefore, we know that in I think it's the in the top 50 DFS stores, there's still something like 10 where we don't have a sophology, on that park or or in in that vicinity. So, you know, I won't name the the towns because that gives it away to landlords, but we've got the target list literally going down from number one down to number 20, and they're looking all the time for the right sort of location.

Operator

In fact, we we will have one soon in Carlisle because that's a great great city city to be in. Lots of white space. So we've got the list. I think we need to balance that with the capital, in terms of and also the right micro locations. We don't really want to open it in a tertiary location.

Operator

We want to open the right location. We know all the parks to be on. So it's just making sure we get targeted, with that opening. So I see that in the next sort of doing our four year planning in a in a while that we'll have a seam of growth for sophology, but very targeted. Ireland, it's actually well that's all DFS, apart from Belfast where, or sophology.

Operator

So sophology has got an opportunity, clearly, you know, the affluence in places like Dublin. So but that then gets into picking euros and lots of technology complications that our IT people will say not yet, please. So, but there's definitely green white space there in Ireland. So I definitely you know, we can see that opportunity in the next few years to grow Sophology's business 25%. In terms of market a change in customer, I don't think it's change in customer.

Operator

We're very clear on the segmentation. So we've got a very clear customer segmentation we spent a long time on. I think what we're getting better at is targeting that, and that's our digital and data tools. So we spend a lot of time going into, you know, 9% of customers start their research online. So we're starting to understand exactly the types of profile we should be looking for and targeting whether you're a Sophology customer or a DFS customer.

Operator

And so because we're working collaboratively from a digital marketing point of view, we're better able to get customers into the right brand. That makes sense? So we know the pools of customers to go for. We're now expecting much better at fishing in those pools and really good investment. So I think, you know, we've got clearer and clearer, haven't we, about the brand propositions.

Operator

And so how do we get two and two equals four, less cannibalization and grow the business? So not necessarily a change, but just better targeting.

Speaker 5

Just a question. Probably work out, but how much are you expecting in terms of cost savings annualizing into the second half? And then related to that, it obviously feels like you've got a lot of tailwinds in terms of the top line momentum and those cost savings potentially coming through. So it feels like it's upside to the guidance you've given in the second half. So what's sort of holding you back from going further there?

Speaker 5

Is there anything you're investing in or perhaps marketing?

Operator

Yes. I think I guess there's a couple of things. So in a sense, it's holding us back. But we just have been here a little bit before. You sometimes don't know it does ebb and flow, right, for those who followed us for a while.

Operator

And if I look at if we look at quarter four, we know firstly, factually, we're going to anniversary the highest comps that we had last year at 6%. So that would naturally see a bit of a drop. But I think from an economic backdrop, you you you you you you mean that there's a bit of a certainty as to what's gonna happen following National Insurance going up and National Living Wage. And what does that do to employment? What does that do to confidence?

Operator

You know, we we serve middle income families who've got properties. And so it's it's a bit of a it's just slightly cautious to whether it will continue. Fantasticly, it does, but I think if we just extrapolate it and went for a bigger number, I'm not sure that's sensible at this point. So I think that's one thing. The second thing is a very micro thing.

Operator

Having a much later Easter this year, year on year is actually not good for us. Last year was a perfect Easter right at the March. We like cold and rain, which is what it was. It was a record Easter. Having it on the April 20 risks sunshine and people doing, you know, park and interesting things.

Operator

So there's a few things against us in quarter four, hence why we're not standing here going, we're gonna extrapolate it. You know, probably being we're optimistic, but we're cautiously optimistic if that makes sense.

Speaker 5

And then just second question, looking at Slide 15 on that, the history of the market, I appreciate what you're saying. You're seeing some nascent signs of the market covering, but it looks like in the last downturn, the next credit crunch, it took almost 25% before it starts to recover. What was the difference between the market then and the market today that makes you think and maybe answer it within sort of view of what the replacement cycle is? What sort of makes you sort of confident that this isn't going to be sort of non protracted?

Operator

Yes. That's a really good question. So if you went back to Credit Crunch, what was different structurally? There's a lot more house moves back then. Like, house moves across the Europe have halved.

Operator

So that's one thing that takes a lot of wind of our our business. Point number one. I think in terms of replacement cycle, for those who followed us for a while, you'll know that the average replacement cycle is about seven years. In good times when confidence is high, it goes down to about six and a half years. And when confidence is low and people are worried, it goes out to seven and a half.

Operator

And we're probably in that territory now. You know, it's been tough for the last three years for our type of customers. And so I do think as confidence is starting to come back, we can see that savings are high. But what's going to trigger them to buy and replace, it'll have to be things like that's why we do IFC to try and encourage people in or new product development. So I I think it's probably a combination of those two.

Operator

I don't think we'll ever get back to the house moves being we're pre pre pre, credit crunch. But what you should see is replacement cycle start to come back a little bit. And again, those who follow us know there's a cycle here and it might well be that in the next couple of years, we're on the upside again. Going to, I think, your point about cost savings was your first question, wasn't it?

Speaker 5

Yeah, indeed.

Speaker 1

Yeah. You're right about that. Yeah. So we've, so you saw what we highlighted in the first half. So we would expect to continue to make progress on the, cost to operate program.

Speaker 1

But perhaps more significantly, we've got quite a few cost headwinds in the second half. So we expect the cost in the second half to be up year on year and half on half. So a few reasons for that. So firstly, the volume in relation to the order intake that you've seen us flagged for the half one. The second thing is we're going to invest in marketing, we've been a bit lighter than we would have liked to have been in the last Q4, so we want to make a considered decision to go back and invest in that in terms of the brand equity.

Speaker 1

We're also going to be looking to reintroduce the bonus and make sure that we're rewarding our people, we weren't able to play that with any level of materiality last year. And then we've also got some of the inflationary headwinds that we've talked to you about, whether that's national insurance contributions, some packaging taxes that we're going to be subject to as well. And so you bring all that together and

Speaker 5

What's the actual constant of the savings, do you think?

Speaker 1

Probably not so dissimilar from what you'd have seen as the new piece in the first half. I'm being a bit cryptic.

Operator

No, no, fair enough.

Speaker 1

Yes. You can definitely work it out.

Operator

Thanks. Good morning.

Speaker 6

I just had a question around new product development. You've obviously introduced quite a lot of new product development. And I was just wondering if anything particularly surprised you in doing well and how you sort of correlate it with your customer data effectively. And then as an associated question, I know you've done quite a lot of reducing more sustainable fabrics and product manufacturing and so forth. And whether you're seeing customers really buy into more sustainable products yet or whether it's just a sort of nice to have.

Operator

Yes. What surprises on product? Well, we we work hard to not have, negative surprises in the sense that well, we do a lot of data. We do a lot of work to understand our customers and what they're buying. We do a lot of buying trips around the world.

Operator

Our teams are looking for what the trends are particularly in The US, particularly in China and some of the emerging Japan, etcetera. So we'll we'll take all of that insight. We'll we understand our customers. And then what we've got is great in in house designers who all they do is design sofas all day, and they they don't know a tub sofa, then it's not worth knowing. And then we get our our partners to bring us innovation.

Operator

And then if we get the bull's eye, we'll trial it in 10 stores. And if it works, we'll roll it out very quickly. So what surprises probably in simple terms is this home cinema trend has been really interesting. So, you know, decline has always been a big part of our business, but actually adding in Bluetooth speakers, vibrating seats, heat I saw somebody here look really excited about the heated seats, and and I am. It it's incredible.

Operator

And, of course, it's one of those trends, isn't it, that's that's picking up. So I think there's more we can do with that. So some of these products are relatively expensive. People buying into the car line. It's good.

Operator

So that's been a good trend. I think technology bringing some of the things that happen in the car industry kind of come through into into our world and I think what that sort of customers are looking for, that level of comfort in the home. So that's been a big trend. I think some of the the brands that we have, you know, talked about our exclusive brands in DFS being 42, 40 three percent. They're real power brands in our business now.

Operator

So real competitive advantage. You know, Ted Baker's absolutely flourishing. So these sorts of products, those sorts of brands resonate well with our type of customers. So that's one thing. I think on sustainability, we're constantly trialing new types of fabrics, new types of interiors.

Operator

I think as the market leader, you know, we're pushing on FSC wood. We're pushing on leather working group. These are all important things to us to do as a market leader in The UK. It's it's hard to do because our scope three emissions, 90 of it is, of all of our emissions, is scope three, which is all about supplier partners and shipping it from around the world. So changing the entire industry is a big challenge, but we're gonna try and do that by innovating.

Operator

It's not super cost effective yet. The cost of those types of materials are not they're not they're clearly not the levels of of the normal, fabrics that you can buy, but and therefore, customers are not willing to pay a premium, you know, in this especially in cost of living crisis. So we've got to try and engineer a way of having sustainability within our products, but at an affordable way. That's that's the challenge, stroke opportunity. That makes sense?

Operator

Andy?

Speaker 7

Hi. Andy Wade from Jefferies. A couple from me. First one, the share gains that you made during the first half, obviously, with order intake running up double digit versus a marked flat being slightly negative, well ahead of what you've delivered as a run rate historically. I'm just interested to dig into why you thought that was.

Speaker 7

Obviously, we know you the range launch was part of it. Like, your use of IFC is probably part of it as well, and and and SES disruption was another part of that. But interested as to if those were the main things or if there are other things as well. And and the sort of follow-up from it, which bits of those when you talk about order intake slowing down a bit in the second half, which specifically of those factors which have helped you are gonna be rolling off, which bits are enduring?

Operator

Well, I think you've hit the nail on head as to what's driving where we're taking share from is a good question. So, you know, to talk about when our number one competitor has been in a bit of disruption, but they will come back. And they're a really good business, and good people. We know them. So, but we haven't seen that happen in half two so far.

Operator

So the the share gains we've made have been held in January, February. And I think that's the reason why we went through why are we winning is because we've got a really good proposition we've invested in. We've been developing products, innovating our products hugely in the last, you know, eighteen, twenty four months or longer. But so I think we've got to a point where the product range in DFS and Sophology is as as good as it's ever been since I've been here. The marketing is as targeted as as good as it's ever been.

Operator

And the people, it's hard to replicate the people because we spent years training them. We've got a part time flexible model, very diverse and inclusive. So it's we match each city that we're in with the type of people that are there and it's driving it's the combination of all of that. And you throw in IFC on the top, I couldn't pick out which bits are saying where's that working that. It's all of it together.

Operator

So therefore that should endure. The competition will catch up, so that might nibble a bit. And it's probably more about, us keeping ahead of the game and leading and bringing in new brands. And the Shaquille O'Neal thing, who is an Nottingham Forest fan, that is absolutely true for making money to do it.

Speaker 6

I was thinking.

Operator

He he he could be a big thing for us in terms of recliners. He's a huge social media presence, very, very well respected. So we've just got to keep innovating and stay ahead of the game, and hoping it will endure. That makes sense?

Speaker 7

Yeah. No. Absolutely. So that's the first one. The second one, so for delivery company, looks like it's been doing really well.

Speaker 7

And you talk about in there having scope to scale. Now, obviously, the main part of that is as well as the return in the market. But, that use that capacity yourself, but interested as to whether it's something that given how high quality the proposition is and how few people are doing attended two man delivery very well, with a a scope to third party logistics through through that network.

Operator

It's a very good question, and the answer is yes. And so we are, you know, actively talking to a few people about doing exactly that. Because what we can offer, you know, this is not a sales pitch, but it's factually true. But given the the densities of delivery that we do, on the vans that we have and the data we have, the cost per order that we can deliver on a variable cost is lower than anybody. So if we can plug smaller businesses into that who don't have those delivery densities, we can give them a great cost benefit.

Operator

But the net promoter scores, particularly from our own teams and and our delivery partners, are super high. And so here's a service that we can offer. Hence, we branded it over delivery company that we could therefore see it as a an asset where we can bring volume in. And we've got a few conversations going. I can't reveal who yet, but the idea would be to plug other, you know, furniture, storage, services in, lower volumes, make better use of the assets, which then gives you even more, you know, synergy, really.

Speaker 7

Interesting. Okay. Thank you. And then the last one was, on home, sort of looking down your well, looking one looking down your growth points, it's sort of number 11 down there, just making it in at the end. Whereas we sort of looked back three years at the the Capital Markets Day, and it sort of felt like the big the big opportunity was within our grasp.

Speaker 7

Now I know a lot's changed since then, at least the market coming back, and the bigger opportunity is probably leveraging the the market volume opportunity. But, sort of interested to what extent the home opportunity is as is as compelling as you thought it was. You know, it feels like it maybe has been stepped back a little bit from the home market to beds and mattresses online. You know, what's your view about that market opportunity now versus that?

Operator

Yeah. I think I think it's it's looks well observed good observation. I think, look, we we've been working the home team in in in our business has been working really hard on getting the proposition right, and it is it's good. But what to turbocharge that growth, we need to invest in marketing, and we probably need to put down space. And so at the moment, if you were to say, where would you put your marketing?

Operator

You put your marketing into sofas, we're probably a bit lightened. Marie alluded to it. We'll be investing a bit more in marketing in half two to drive what's clearly the core business, the profitable business. That's the first thing you would do. And we wanna drive profit.

Operator

We wanna drive down debt. So that's where you go. But we do still see the opportunity in beds and mattresses, but we're gonna need to put down mezzanines and space, which is gonna cost a little capital. And we need to invest in marketing, which if you have the choice, you put it into Sofa's First. So it's there, but it's and it's one of those things in our four year plan that you go, we can absolutely see a route to get there.

Operator

But there's lower hanging fruit in front of us now, self help. And, you know, in the end, there's only a certain amount of people in the organization, certain amount of cash, and so we have to make choices. I guess that's that's the choice we've made for now.

Speaker 7

Yeah. Very helpful. Thank you very much.

Operator

Anything? Okay. Thanks very much, everybody. No, no. Too much for that.

Operator

No, no. Too much for that. No, no. Alright. Well, thanks very much, everybody.

Operator

Have a great rest of the day. Yes. Thank you.

Powered by Quartr
Earnings Conference Call
DFS Furniture H1 2025
00:00 / 00:00