Our strategy is made up of the three pillars of our business: Our DFS brand, our Sofology brand, and our expansion into the Home market. The growth of our pillars will be enabled by our group
enabling platforms: Technology and data, Logistics, Sourcing and manufacturing and People and culture. The strategy reflects the Group’s expertise, scale, assets and supporting infrastructure
and the ability to use our enabling platforms to both improve the operational efficiency and the growth across our brand portfolio.
We are committed to building a sustainable business model, both in terms of our impact on the environment and preserving our long-term success as a Group.
Section 172(1) (a)-(f) of the Companies Act 2006 (‘Section 172(1)’) requires a director of a company to act in the way he or she considers, in good faith,
would most likely promote the success of the company for the benefit of its members as a whole.
in the day-to-day operations and assess the progress against targets, while ensuring that sufficient oversight, guidance, support and resource are available.
Monthly meetings
SUSTAINABILITY CHAMPIONS AND INCLUSION COUNCIL
We want to empower our colleagues to drive change and improvements in both environmental and social areas. The goal of these councils
is to educate and engage the wider population as well as support business initiatives and generate ideas.
Bi-monthly meetings
OversightManagement roles
Responsible and Sustainable Business Committee (RSC)
Group Steering Committees (inclusion and sustainability)
Audit Committee
Group Sustainability and ESG meeting
RESPONSIBILITY AND SUSTAINABILITY REPORT
DFS Furniture plc
61
Strategic Report
RESPONSIBILITY AND SUSTAINABILITY REPORT
Depreciation, amortisation and impairments(94.1)(88.2)
Operating profit63.887.3
Finance income0.2–
Finance expenses (34.3)(28.8)
Profit before tax29.758.5
A geographical analysis of revenue is presented below:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
United Kingdom1,067.71,129.3
Republic of Ireland21.220.5
Total revenue 1,088.91,149.8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
DFS Furniture plc
124
Financial Statements
continued
Segment assets and liabilities
AssetsLiabilities
25 June 2023
£m
26 June 2022
£m
25 June 2023
£m
26 June 2022
£m
DFS942.9948.4(537.3)(625.0)
Sofology146.0167.6(135.3)(142.6)
Other segments26.430.0(51.8)(52.2)
Total segments1,115.31,146.0(724.4)(819.8)
Loans and financing––(165.8)(93.5)
Financial assets/(liabilities)0.717.6(6.9)–
Current tax2.77.8––
Deferred tax15.510.8––
Eliminations(75.0)(62.3)75.062.3
Total Group1,059.21,119.9822.1(851.0)
Segment assets comprise tangible and intangible non-current assets including goodwill and brand names, inventories, trade and other receivables, cash and cash equivalents.
Segment liabilities comprise trade payables and current and non-current other liabilities and provisions.
Additions to non-current assets
Depreciation, amortisation
and impairment
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
DFS42.772.070.166.0
Sofology11.414.817.617.3
Other segments6.012.56.44.9
Total Group60.199.394.188.2
Additions to non-current assets include both tangible and intangible non-current assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Group operating profit is stated after charging/(crediting):
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Depreciation on tangible assets (including depreciation on right of use assets)80.577.7
Amortisation of intangible assets11.610.5
Impairments2.0–
Net gain on disposal of property, plant and equipment(0.8)(1.1)
Net loss/(gain) on disposal of right of use assets(1.2)0.1
Cost of inventories recognised as an expense509.1548.1
Write down of inventories to net realisable value2.04.6
Other costs of sales(14.4)(8.8)
Release of provisions (note 20)(0.9)(2.1)
Government grants received (business rates relief)(0.2)(2.0)
Operating lease rentals0.20.7
Non-underlying items
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Release of lease guarantee provision(0.5)(0.3)
Restructuring costs–0.9
Acquisition costs–(0.2)
(0.5)0.4
The release of the lease guarantee provision relates to the property provisions detailed in note 20.
In addition to the non-underlying items for continuing operations above, a further £3.8m of non-underlying credits were recognised in respect of discontinued operations.
This amount related to the closure costs of discontinued operations. Further details are presented in note 29 to the consolidated financial statements.
Auditor’s remuneration
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Audit of these financial statements0.30.3
Audit of the financial statements of Group subsidiaries0.50.4
Amounts receivable by the Company’s auditor and its associates in respect of:
All other services0.1–
0.90.7
During the period, an amount of £49,500 was paid to the Company’s auditor in respect of the review of the Group’s interim financial statements (FY22: £49,500) and £35,000
in respect of other audit related assurance services (FY22: £nil).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
DFS Furniture plc
126
Financial Statements
4 Staff numbers and costs – continuing operations
The average number of persons employed by the Group during the period, analysed by category, was as follows:
Number of employees
52 weeks to
25 June 2023
52 weeks to
26 June 2022
Production1,0161,009
Warehouse and transport1,3561,315
Sales and administration3,1673,182
5,5395,506
The aggregate payroll costs of these persons were as follows:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Wages and salaries177.4180.7
Social security costs17.517.6
Other pension costs5.85.6
200.7203.9
Share based payment expense (equity settled)1.82.6
202.5206.5
Aggregate remuneration payable to directors in respect of qualifying services was as follows:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Emoluments1.61.3
Pension contributions–0.1
Gain on exercise of share options–0.9
Three directors accrued retirement benefits under pension schemes in the period (2022: two). All of the directors’ pension contributions were to defined contribution schemes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
DFS Furniture plc
127
Financial Statements
5 Finance income and expense
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Finance income
Interest income on bank deposits0.2–
Total finance income0.2–
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Finance expense
Interest payable on senior revolving credit facility10.42.5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
DFS Furniture plc
128
Financial Statements
continued
Reconciliation of effective tax rate
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Profit before tax for the period from continuing and discontinued operations33.544.8
Tax using the UK corporation tax rate of 20.5% (2022: 19%)6.98.5
Non-deductible expenses2.32.2
Tax exempt revenues(1.0)(1.1)
Effect of tax rates in foreign jurisdictions(0.4)1.4
Recognition of previously unrecognised tax losses–0.3
Adjustments in respect of share options0.30.4
Adjustment in respect of prior years(1.4)0.1
Impact of change in tax rate on deferred tax balances0.41.6
Total tax expense7.113.4
The Finance Act 2021, which was substantively enacted in May 2021, included provisions to increase the rate of UK corporation tax to 25% with effect from 1 April 2023.
Deferred taxation is measured at tax rates that are expected to apply in the periods in which temporary timing differences are expected to reverse based on tax rates
and laws that have been enacted or substantively enacted at the balance sheet date. Accordingly, a tax rate of 25% has been applied when calculating deferred tax
assets and liabilities at 25 June 2023 (25% at 26 June 2022).
Income tax recognised in other comprehensive income
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Effective portion of changes in fair value of cash flow hedges(1.8)4.8
Net change in fair value of cash flow hedges reclassified to profit or loss(3.0)0.4
Impact of change in tax rate on deferred tax balances(1.1)1.2
(5.9)6.4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
DFS Furniture plc
129
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
7 Earnings per share
Statutory earnings per share
Basic earnings per share is calculated by dividing the
net profit or loss for the financial period attributable
to ordinary equity holders of the parent company
by the weighted average number of ordinary shares
outstanding during the period. The weighted
average number of shares reflects the movements
in share capital detailed in note 22 and the impact of
movements in treasury shares held by the Company.
Changes in the Company’s capital structure with no
corresponding change in resources are reflected as
if they had occurred at the beginning of the earliest
period presented.
Diluted earnings per share is calculated using the same
net profit or loss for the financial period attributable
to ordinary equity holders of the parent company, but
increasing the weighted average number of ordinary
shares by the dilutive effect of potential ordinary
shares. Potential ordinary shares arise from employee
share based payment arrangements (note 25). Where
share based payments are subject to performance
conditions, they are included as potential ordinary
shares to the extent that the performance conditions
have been met at the reporting date. Details of share
based payment vesting conditions are provided in the
Profit/(loss) for the period attributable to equity holders of the parent company
– from continuing operations23.044.2
– from discontinued operations3.1(12.8)
26.131.4
25 June 2023
No.
26 June 2022
No.
Weighted average number of shares in issue for basic earnings per share235,470,857254,675,661
Dilutive effect of employee share based payment awards1,783,3651,220,492
Weighted average number of shares in issue for diluted earnings per share237,254,222255,896,153
Underlying earnings per share
Underlying basic earnings per share and underlying diluted earnings per share are calculated by dividing the profit for the period attributable to ordinary equity holders of
the parent company, as adjusted to exclude the effect of non-underlying items, by the same weighted average numbers of ordinary shares above used for basic and diluted
earnings per share respectively.
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Continuing operations
Profit for the period attributable to equity holders of the parent company23.044.2
Non-underlying (profit)/loss after tax(0.4)0.4
Underlying profit for the period attributable to equity holders of the parent company from continuing operations22.644.6
DFS Furniture plc
130
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Discontinued operations
Profit/(loss) for the period attributable to equity holders of the parent company3.1(12.8)
Non-underlying (profit)/loss after tax(3.5)11.3
Underlying loss for the period attributable to equity holders of the parent company from discontinued operations(0.4)(1.5)
52 weeks to
25 June 2023
pence
52 weeks to
26 June 2022
pence
Underlying basic earnings/(loss) per share
– from continuing operations9.617.5
– from discontinued operations(0.2)(0.6)
Total underlying basic earnings per share9.416.9
Underlying diluted earnings/(loss) per share
– from continuing operations9.517.4
– from discontinued operations(0.2)(0.6)
Total underlying diluted earnings per share9.316.8
DFS Furniture plc
131
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
8 Property, plant and equipment
Land and
buildings
£m
Plant and
equipment
£m
Motor
vehicles
£m
Right of use
assets
£m
Total
£m
Cost
Balance at 27 June 202120.5192.510.2462.9686.1
Reclassification–0.9(0.1)(0.4)0.4
Additions2.034.40.451.988.7
Remeasurements–––5.45.4
Disposals(0.6)(45.3)(1.8)(9.6)(57.3)
Balance at 26 June 202221.9182.58.7510.2723.3
Reclassification(8.3)49.38.88.358.1
Additions0.120.40.125.045.6
Remeasurements–––7.07.0
Disposals(0.2)(15.7)(5.1)(26.1)(47.1)
Balance at 25 June 202313.5236.512.5524.4786.9
Depreciation and impairments
Balance at 27 June 20211.7121.48.5117.8249.4
Reclassification–0.5–(0.4)0.1
Depreciation charge for the period0.419.80.558.579.2
Impairments0.11.20.13.14.5
Disposals(0.1)(45.2)(1.7)(6.8)(53.8)
Balance at 26 June 20222.197.77.4172.2279.4
Reclassification(1.7)49.38.81.758.1
Depreciation charge for the period0.420.90.858.480.5
Impairments–––2.02.0
Disposals(0.2)(15.3)(5.1)(22.5)(43.1)
Balance at 25 June 20230.6152.611.9211.8376.9
Net book value
At 27 June 202118.871.11.7345.1436.7
At 26 June 202219.884.81.3338.0443.9
At 25 June 202312.983.90.6312.6410.0
Reclassifications in the year between gross cost and depreciation between plant and equipment and motor vehicles relate to historic disposals made at £nil net book value.
In addition, other assets previously presented within land and buildings have been reclassified to property right of use assets during the year. None of these reclassifications
impacted reported profit or total non-current assets. Accordingly, the Directors do not consider the changes sufficiently material to require restatement of prior period balances.
Capital commitments
At 25 June 2023 the Group had contracted capital commitments of £9.1m (2022: £11.8m) for which no provision has been made in the financial statements. Plant and
equipment includes leasehold improvements.
DFS Furniture plc
132
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
9 Leases
Right of use assets
Property
£m
Vehicles
£m
Equipment
£m
Total
£m
Cost
At 27 June 2021443.317.71.9462.9
Reclassification(0.4)––(0.4)
Additions44.27.7–51.9
Remeasurements5.4––5.4
Disposals(6.8)(2.8)–(9.6)
At 26 June 2022485.722.61.9510.2
Reclassification8.3––8.3
Additions16.38.7–25.0
Remeasurements7.0––7.0
Disposals(24.0)(2.1)–(26.1)
At 25 June 2023493.329.21.9524.4
Depreciation and impairment
At 27 June 2021108.08.61.2117.8
Reclassification(0.4)––(0.4)
Depreciation charge for the period54.63.70.258.5
Disposals(4.1)(2.7)–(6.8)
Impairments 3.1––3.1
At 26 June 2022161.29.61.4172.2
Reclassification1.7––1.7
Depreciation charge for the period53.74.50.258.4
Disposals(20.5)(2.0)–(22.5)
Impairments 2.0––2.0
At 25 June 2023198.112.11.6211.8
Net book value
At 27 June 2021335.39.10.7345.1
At 26 June 2022324.513.00.5338.0
At 25 June 2023295.217.10.3312.6
Amounts recognised in the consolidated balance sheet:
25 June 2023
£m
26 June 2022
£m
Current lease liabilities84.189.0
Non-current lease liabilities327.3356.4
For more information on the maturity of the Group’s lease liabilities, see note 24.
DFS Furniture plc
133
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Amounts recognised in the consolidated income statement:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Interest on lease liabilities(23.5)(25.0)
Variable lease payments not included in the measurement of lease liabilities(0.3)1.0
Income from subleasing right of use assets0.40.1
Expenses relating to short term leases and low value leases(0.3)(1.8)
Amounts recognised in the consolidated cash flow statement:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Total cash outflow for lease liabilities85.188.5
Non-cancellable short term lease rentals are payable as follows:
25 June 2023
£m
26 June 2022
£m
Less than one year0.60.1
Between one and five years––
More than five years––
0.60.1
The Group has entered into short term leases in respect of warehouses and equipment.
At 25 June 2023, future rentals receivable under non-cancellable leases where the Group is the lessor were £2.4m (2022: £2.8m).
DFS Furniture plc
134
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
10 Intangible assets
Computer
software
£m
Brand names
£m
Goodwill
£m
Total
£m
Cost
Balance at 27 June 202144.914.8509.3569.0
Reclassification(0.2)––(0.2)
Additions10.6––10.6
Disposals––––
Balance at 26 June 202255.314.8509.3579.4
Reclassification0.9––0.9
Additions14.5––14.5
Disposals(0.1)––(0.1)
Balance at 25 June 202370.614.8509.3594.7
Amortisation and impairments
Balance at 27 June 202128.55.1–33.6
Amortisation charge for the period9.11.4–10.5
Impairments–0.51.01.5
Balance at 26 June 202237.67.01.045.6
Reclassification0.9––0.9
Amortisation charge for the period10.21.4–11.6
Disposals(0.1)––(0.1)
Balance at 25 June 202348.68.41.058.0
Net book value
At 27 June 202116.49.7509.3535.4
At 26 June 202217.77.8508.3533.8
At 25 June 202322.06.4508.3536.7
Goodwill
The carrying amount of goodwill is allocated to the following cash generating units:
Goodwill
25 June 2023
£m
26 June 2022
£m
DFS Trading Limited479.9479.9
Sofology Limited28.428.4
508.3508.3
DFS Furniture plc
135
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Goodwill is tested annually for impairment on the basis of value in use. The key assumptions underlying the calculations are those regarding expected future sales volumes,
changes in selling prices and direct costs and the discount rate applied.
Cash flow forecasts are prepared from the latest financial results and internal budgets for the next four years, which take into account external macroeconomic indicators
as well as internal growth expectations for each cash generating unit. Selling prices and related costs are based on past practice and expected future changes in the
market. The base case forecast assumes a further underlying contraction in the Group’s market of 5% in FY24, followed by a slow recovery (mid single digit annual growth)
in subsequent years. The base case also reflects a cautious assessment of the anticipated growth in the Group’s market share driven by delivery of our strategic initiatives.
Revenue is assumed in line with order intake, keeping order bank levels relatively consistent across the assessment period.
Gross margin percentage for FY24 is expected to be ahead of FY23 through more effective sourcing and the annualised impact of price increases and freight rate reductions
already implemented. Other costs reflect anticipated inflationary increases and benefits from specific cost saving initiatives. Capital expenditure is assumed to remain in line
with planned investments and strategic initiatives.
A terminal value was then calculated on the basis of the four year plan and an estimated long-term growth rate for the UK upholstery furniture sector of 2.0% (2022: 2.0%).
These cash flow forecasts were then discounted at pre-tax discount rates of 13.3% to 14.6% (2022: 10.3% – 11.1%). The discount rates are estimated based on the Group’s
weighted average cost of capital (derived from market indices of risk-free rates, market risk premia, peer group analysis and the Group’s own borrowing costs), risk adjusted
for an individual unit’s circumstances.
For DFS and Sofology, the value in use calculations showed a significant headroom between the calculated value in use and the carrying value of goodwill in the financial
statements. A number of sensitivities were then applied to the base case model to assess whether any reasonably possible changes in assumptions could cause
an impairment that would be material to these consolidated financial statements. This analysis applied a number of challenging scenarios, including: possible shortfalls
in revenue or gross margin compared to plan, a decrease in the long term growth rate of the UK upholstery market, further increases in UK interest rates, and changes in
applicable discount rates. On the basis of this analysis the Directors concluded that a reasonably possible change in assumptions would not lead to an impairment
being recognised.
11 Investments in subsidiaries
The following companies are incorporated in England & Wales, with the exception of Coin Retail Limited (Jersey) which is incorporated in Jersey. They are all wholly owned by
the Group and have been consolidated in these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
12 Other financial assets
25 June 2023
£m
26 June 2022
£m
Non-current
Foreign exchange contracts–4.8
Current
Foreign exchange contracts0.712.8
Foreign exchange contracts comprise forward contracts which are used to hedge exchange risk arising from the Group’s overseas purchases (note 24).
13 Deferred tax
Deferred tax assets and liabilities are attributable to the following:
25 June 2023
£m
26 June 2022
£m
Fixed asset timing differences4.43.6
IFRS 167.810.6
Remeasurement of derivatives to fair value3.0(4.4)
Tax losses carried forward–0.4
Brand names(1.5)(1.9)
Share based payments0.70.7
Other temporary differences1.11.8
Net tax assets15.510.8
The deferred tax movement in the period is as follows:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
At start of period10.824.7
(Charged)/credited to the income statement:
Fixed asset timing differences0.8(3.7)
Unwind of IFRS 16 transition impact(2.8)(1.2)
Tax losses carried forward(0.4)(2.2)
Brand names0.40.3
Share based payments–(0.5)
Derivatives1.5–
Other temporary differences(0.7)(0.1)
Recognised in the statement of comprehensive income5.9(6.5)
At end of period15.510.8
Deferred tax assets on losses of £4.7m (2022: £5.3m) have not been recognised as there is uncertainty over the utilisation of these losses.
DFS Furniture plc
137
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
14 Inventories
25 June 2023
£m
26 June 2022
£m
Raw materials and consumables8.97.3
Finished goods and goods for resale62.876.0
71.783.3
Write-down to net realisable value(15.9)(18.9)
55.864.4
In applying its accounting policy for inventory, the Group identifies those items where there is a risk that net realisable value does not exceed cost, due to either the age
or condition of the item. An estimate of the net realisable value of such items is made based on the sale of similar items in the past, taking into account expected future
opportunities for sale, and their carrying value reduced by an appropriate provision.
15 Trade and other receivables
25 June 2023
£m
26 June 2022
£m
Trade receivables 7.712.6
Prepayments3.011.4
Accrued income0.10.3
Other receivables0.3–
11.124.3
No interest is charged on trade receivables; the Group bears no credit risk in respect of amounts due from retail customers under interest free credit arrangements.
Prepayments and accrued income do not include impaired assets.
16 Trade payables and other liabilities
25 June 2023
£m
26 June 2022
£m
Current
Payments received on account39.172.2
Trade payables97.6122.5
Other creditors including other tax and social security34.732.5
Accruals53.553.5
224.9280.7
Payments on account represent contract liabilities under IFRS 15, which will be realised through revenue in the subsequent financial year. Trade payables do not bear interest
and are paid within agreed credit terms. For more information on lease liabilities, see note 1.12.
DFS Furniture plc
138
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
17 Other financial liabilities
25 June 2023
£m
26 June 2022
£m
Non-current
Foreign exchange contracts0.2–
Current
Foreign exchange contracts6.7–
Foreign exchange contracts comprise forward contracts which are used to hedge exchange risk arising from the Group’s overseas purchases (note 24).
18 Other interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are measured at amortised cost. For more
information about the Group’s exposure to interest rate and foreign currency risk, see note 24.
25 June 2023
£m
26 June 2022
£m
Senior revolving credit facility167.095.0
Unamortised issue costs(1.2)(1.5)
165.893.5
The revolving credit facility in place at the year end bore interest at a rate of credit spread adjusted SONIA plus 2.955% and was repayable on 21 December 2025. The revolving
credit facility was secured on a first priority basis with fixed and floating charges over substantially all of the assets of the Group. Subsequent to the year end, the Group
undertook a refinancing of its debt, replacing the previous £215.0m revolving credit facility with a £200.0m facility maturing in September 2027 and £50.0m of private debt.
Refer to note 30 for further details.
For more information on the maturity of the Group’s lease liabilities, see note 24.
19 Employee benefits
Defined contribution pension plans
The Group operates a number of defined contribution pension plans under which contributions by the employees and the Group are administered by trustees in funds
separate from the Group’s assets. The costs of these schemes are charged to the income statement as they become payable under the rules of the scheme. The total
pension cost of the Group for the period was £5.8m (2022: £5.6m).
DFS Furniture plc
139
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
20 Provisions
Guarantee
provision
£m
Property
provisions
£m
Other
provisions
£m
Total
£m
Balance at 26 June 20228.74.06.419.1
Provisions made during the period3.81.7–5.5
Provisions used during the period(5.0)(0.6)(1.2)(6.8)
Provisions released during the period–(0.5)(4.2)(4.7)
Balance at 25 June 20237.54.61.013.1
Current5.20.30.76.2
Non-current2.34.30.36.9
7.54.61.013.1
The Group offers a long-term guarantee on its upholstery products and in accordance with accounting standards a provision is maintained for the expected future cost
of fulfilling these guarantees on products which have been delivered before the reporting date. In calculating this provision the key areas of estimation are the number of
future claims, average cost per claim and the expected period over which claims will arise (nearly all claims arise within two years of delivery). The Group has considered the
sensitivity of the calculation to these key areas of estimation, and determined that a 10% change in either the average cost per claim or the number of expected future calls
would change the value of the calculated provision by £0.8m. The directors have therefore concluded that reasonably possible variations in estimate would not result in a
material difference.
Property provisions relate to potential obligations under lease guarantees offered to former subsidiary companies, the majority of which expire in 2025, and wear and tear
costs for Group properties based on anticipated lease expiries and renewals, which will predominantly be utilised more than five years from the reporting date.
Other provisions relate to payment of refunds to customers for payment protection insurance policies and other regulatory costs. Other provisions also include costs
associated with the exit from the Netherlands and Spain, see note 29 for details.
DFS Furniture plc
140
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
21 Dividends
The following dividends were recognised and paid during the period:
Pence per
ordinary share
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Final ordinary dividend for FY217.5p–19.0
Interim ordinary dividend for FY223.7p–9.4
Special dividend10.0p–25.4
Final dividend for FY223.7p8.6–
Interim ordinary dividend for FY231.5p3.5–
12.153.8
The Directors recommend a final dividend of 3.0p in respect of the financial period ended 25 June 2023, resulting in a total proposed dividend of £6.9m. Subject to
shareholder approval it is intended that this dividend will be paid on 29 December 2023. DFS Furniture plc shares will trade ex-dividend from 30 November 2023 and the
record date will be 1 December 2023. This dividend has not therefore been recognised as a liability in these financial statements.
22 Capital and reserves
Share capital
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Ordinary shares of £0.10 each
Number of shares
‘000
Ordinary shares
£m
Allotted, called up and fully paid
At the start of the financial period258,63725.9
Cancelled during the financial period(17,959)(1.8)
At the end of the financial period240,67824.1
On 9 November 2022 17,958,600 ordinary shares which had been held in treasury were cancelled.
Share premium
The share premium account represents the surplus of consideration received for issued ordinary share capital over its nominal value. This arose on the issue of ordinary
shares on 11 March 2015.
Merger reserve
The merger reserve arose on the issue of shares in the Company in exchange for minority interests in the issued share capital of a subsidiary company on 10 March 2015.
Capital redemption reserve
The capital redemption reserve represents the par value of cancelled treasury shares.
Treasury shares
Where the Company purchases the Company’s equity share capital into treasury (treasury shares), the consideration paid, including any directly attributable incremental
costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled, reissued or disposed of.
During the period ended 25 June 2023 21,694,437 shares (2022: 2,585,666) were acquired at a total cost of £30.9m (2022: £4.4m). 17,958,600 treasury shares (2022: nil)
were cancelled on 9 November 2022. None of the Company’s own ordinary shares (2022: 63,444) were used to satisfy employee share based payment awards during
the year. At 25 June 2023 the company had 6,533,700 ordinary shares held in treasury (2022: 2,797,863).
DFS Furniture plc
141
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Employee Benefit Trust shares
The Employee Benefit Trust holds ordinary shares which are issued for the purpose of satisfying future employee share based payments awards and is consolidated into the
During the period ended 25 June 2023 the Company acquired and issued no ordinary shares to the Employee Benefit Trust (2022: 3,000,000). 172,800 shares were used
during the period (2022: 824,009). At 25 June 2023 the Employee Benefit Trust held 3,686,178 of the Company’s ordinary shares (2022: 4,040,978).
23 Financial instruments: categories and fair value
25 June 2023
£m
26 June 2022
£m
Financial assets
Derivatives in designated hedging relationships0.717.6
Loans and receivables8.012.6
Cash26.717.3
Financial liabilities
Derivatives in designated hedging relationships(6.9)–
Senior revolving credit facility(165.8)(93.5)
Bank overdraft–(12.3)
Amortised cost(164.2)(195.1)
Finance lease obligations(412.2)(445.4)
All derivatives are categorised as Level 2 under the requirements of IFRS 7 as they are valued using techniques based significantly on observed market data.
The Directors have reviewed for expected credit losses and consider the amount of any such losses to be immaterial.
The Directors consider that the fair values of each category of the Group’s financial instruments are the same as their carrying values in the Group’s balance sheet.
DFS Furniture plc
142
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
The objectives, policies and processes governing the treasury activities of the Group are reviewed and approved by the Board. The Group’s documented treasury policy
includes details of authorised counterparties, instrument types and transaction limits and principles for the management of liquidity, interest and foreign exchange risks.
As part of its strategy for the management of these risks the Group uses derivative financial instruments. The Group does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes.
Liquidity risk
The Group manages its cash and borrowing requirements to ensure that it has sufficient liquid resources to meet its obligations as they fall due while making efficient use
of the Group’s financial resources.
The table below shows the maturity analysis of the undiscounted remaining contractual cash flows (including interest) of the Group’s financial liabilities:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Interest rate risk management
The Group’s operating profit is affected by the cost of providing interest free credit to its customers. This cost is in turn impacted by interbank lending rates, including SONIA.
While the relationship is not wholly direct, an increase in SONIA of one percentage point would reduce the Group’s reported revenue by 0.6%.
The Group is also exposed to interest rate risk on its senior revolving credit facility, which bears interest at a floating rate of credit spread adjusted SONIA plus a margin
(2.955% at 25 June 2023); no related interest rate hedging was in place as at 25 June 2023. Based on drawn amounts under the facility at that date, an increase of one
percentage point in SONIA would increase the Group’s annual interest cost by £1.7m.
Foreign exchange risk management
The Group is exposed to the risks of exchange rate fluctuations on the purchase of products denominated in foreign currencies. Currency requirements are assessed by
analysis of historic purchasing patterns by month, adjusted as appropriate to take into account current trading expectations. The Group’s treasury policy allows for the use
of forward foreign exchange contracts to hedge the exchange rate risk arising from these anticipated future purchases up to 16 months in advance. These contracts are
designated as cash flow hedges.
The table below summarises the forward foreign exchange contracts outstanding at the period end:
Notional amountFair value
25 June 2023
£m
26 June 2022
£m
25 June 2023
£m
26 June 2022
£m
Derivatives in designated hedging relationships
US Dollar137.9194.6(6.2)17.6
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
AssetsLiabilities
25 June 2023
£m
26 June 2022
£m
25 June 2023
£m
26 June 2022
£m
US Dollar12.91.5(18.8)(10.3)
Euro3.04.2(0.2)(0.2)
Foreign currency sensitivity analysis
The Group’s primary foreign currency exposures are to US Dollars and the Euro. The table below illustrates the hypothetical sensitivity of the Group’s reported profit and
closing equity to a 10% weakening of these currencies against Sterling, assuming all other variables were unchanged. The sensitivity rate of 10% represents the directors’
assessment of a reasonably possible change, based on historic volatility.
The analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency
rates. The analysis assumes that exchange rate fluctuations on currency derivatives that form part of an effective cash flow hedge relationship affect the cash flow hedging
reserve in equity.
Positive figures represent an increase in profit or equity.
Income statementEquity
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
US Dollar0.60.9(13.2)(20.8)
Euro(0.3)(0.4)––
DFS Furniture plc
144
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
A 10% strengthening of the above currencies against the Sterling at the period end would have had the equal but opposite effect on the above currencies to the amounts
shown above, on the basis that all other variables remain constant.
IFRS 9 requires the Group to ensure that hedge accounting relationships are aligned with the Group’s risk management objectives and strategy and to apply a qualitative and
forward-looking approach to assessing hedge effectiveness. The Group determines the existence of an economic relationship between the hedging instrument and the
hedged item based on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship
is expected to be and, has been, effective in offsetting cash flows of the hedged item using the hypothetical derivative method.
In these hedge relationships, the main sources of ineffectiveness are:
–the effect of counterparties and the Group’s own credit risk on the fair value of the forward foreign exchange contracts, which is not reflected in the change in the fair
value of the hedged cash flows attributable to the change in exchange rates; and
–changes in the timing of the hedged transactions.
Financial risk management
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from
the Group’s investment securities.
Investments of cash, borrowings and derivative instruments are transacted only through counterparties meeting the credit rating and investment criteria specified in the
Group’s treasury policy. The Group’s exposure and the credit ratings of its counterparties are regularly reviewed. Concentrations of risk are mitigated through the use of
multiple counterparties and by counterparty limits which are reviewed and approved by the Board. The Group considers that expected credit losses on derivative assets
arising from the default of counterparties are not material.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics.
Capital management
The capital structure of the Group consists of debt, as analysed in note 27, and equity attributable to the equity holders of the parent company, comprising issued capital,
reserves and retained earnings as shown in the consolidated statement of changes in equity. The Group manages its capital with the objective that all entities within the Group
continue as going concerns while maintaining an efficient structure to minimise the cost of capital. The Group is not restricted by any externally imposed capital requirements.
25 Share based payments
The Group has four share based payment schemes in operation:
Long Term Incentive Plan (LTIP)
The LTIP is a discretionary executive reward plan that allows the Group to grant conditional share awards or nil-cost options to selected executives at the discretion of the
Remuneration Committee. The scheme is focused on the senior leadership roles in the Group, including Executive Directors. The maximum value of LTIP awards granted
to an individual is 150% of base salary, although the Remuneration Committee may in exceptional circumstances increase this to 300%.
LTIP awards vest after a three year performance period subject to the achievement of performance measures based on earnings per share and total shareholder return
targets. Further information on LTIP performance targets and awards made to Directors is given in the Directors’ Remuneration Report on pages 78 to 99.
Based on the scheme rules,the Group may settle the vested shares in cash sum equivalent to the market value of the shares and this decision is driven solely at the discretion
of the Board. During the year, no LTIP shares vested, so no cash payments were made to participating employees (2022: £1.5m). As there is no present obligation that the
Group will settle future awards in cash, the Group will continue to recognise the LTIP as an equity settled scheme.
Deferred bonus scheme (DBS)
25% of any bonus earned by the Executive Directors is granted as a deferred award under the Deferred Bonus Plan. The deferred award ordinarily has a vesting period of
three years, and its vesting is conditional on the participant’s continued employment with the Group at the end of the vesting period unless they are a ‘good leaver’.
DFS Furniture plc
145
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Restricted Share Plan (RSP)
The RSP is also a discretionary reward plan under which conditional share awards or nil-cost options may be granted to individuals in key executive roles in the Group,
excluding Executive Directors and other recipients of LTIP awards. Awards may not exceed 50% of an individual’s salary for a particular financial year.
RSP awards vest after a three year performance period (other than those granted shortly after Admission vested in July 2017). For awards granted on or after 1 July 2019,
50% of awards made to each individual are subject to either an earnings per share or underlying profit before tax performance target; remaining awards are not subject to
other performance conditions.
Based on the scheme rules,the Group may settle the vested shares in cash sum equivalent to the market value of the shares and this decision is driven solely at the discretion
of the Board. During the year, the Group settled part of the vested RSP shares by offering cash payments (£0.3m, FY22: £1.2m) to participating employees. As there is no
present obligation that the Group will settle future awards in cash,the Group will continue to recognise the RSP as an equity settled scheme.
Save as You Earn (SAYE)
SAYE schemes are currently available to all employees in the UK and Republic of Ireland, with invitations to participate generally issued on an annual basis and subject to
HMRC rules. The current maximum monthly savings limit for the schemes is £500. Options are granted at the prevailing market share price less a discount of 20% and
vest three years from the date of grant.
The movements in outstanding awards under each of the schemes are summarised below:
52 weeks to 25 June 202352 weeks to 26 June 2022
LTIP
No.
DBS
No.
RSP
No.
SAYE
No.
LTIP
No.
DBS
No.
RSP
No.
SAYE
No.
Outstanding at the beginning of the period1,982,26393,9382,692,8754,116,0291,929,231-3,113,5294,197,239
Outstanding at the end of the period2,567,54660,2113,765,97710,925,4241,982,26393,9382,692,8754,116,029
Weighted average remaining contractual life (months)18.815.920.428.115.927.616.019.4
Weighted average share price at exercise––£1.15–£2.45–£1.64£2.28
At 25 June 2023 the weighted average exercise price of outstanding SAYE options was £1.01 (2022: £1.81) and the range of exercise prices was £0.88 to £2.18 (2022: £1.62
to £2.18). At 25 June 2023 there were 408,057 (2022: 148,051) exercisable SAYE options, with a weighted average exercise price of £1.88 (2022: £1.80). There were no
exercisable LTIP, DBP or RSP options at 25 June 2023 (2022: nil).
DFS Furniture plc
146
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Fair value calculations
The LTIP, DBS, RSP and SAYE awards are all accounted for as equity-settled under IFRS 2. The fair value of LTIP awards which are subject to a market based performance
condition (total shareholder return) is calculated using a stochastic (Monte Carlo) option pricing model. RSP awards, SAYE awards and LTIP awards subject to a non-market
based performance condition (earnings per share) are valued using a Black-Scholes option pricing model. The inputs to these models for awards granted during the financial
period are detailed below:
LTIPRSPSAYE
Grant date
12 October 2022 and
14 December 2022
12 October
2022
21 November
2022
Share price at date of grant£1.05 and £1.51£1.05£1.43
Exercise priceNilNil£0.89
Volatility36.5% to 42.7%
1
–
2
47.8%
Expected life3 years3 years3.3 years
Risk free rate3.3% to 4.5%
1
–
2
3.2%
Dividend yield–
3
7.1%5.2%
Fair value per share
Market based performance conditions£0.39 to £0.69
1
––
Non-market based performance condition£0.91 to £1.40
1
£0.85–
No performance condition–£0.85£0.88
1. The 2022 LTIP grant included a number of required holding periods, giving a range of volatility and fair values.
2. Volatility and risk free rates do not impact the fair value calculation for awards with no exercise price or market based performance condition.
3. LTIP participants are entitled to receive dividend equivalents on unvested awards therefore dividend yield does not impact the fair value calculation.
Expected volatility is calculated over the period of time commensurate with the relevant performance period or holding period. Expected life has been assumed to equate
to the vesting period of the awards.
The total share based payment expense included in administration costs in respect of the above schemes was £1.8m (2022: £2.6m).
DFS Furniture plc
147
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
26 Net cash from operating activities
Note
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Profit for the period26.231.4
Adjustments for:
Income tax expense67.113.4
Finance income5(0.2)–
Finance expenses534.329.1
Depreciation of property, plant and equipment822.120.7
Depreciation of right of use assets958.458.5
Amortisation of intangible assets1011.610.5
Impairment of assets82.06.0
Gain on sale of property, plant and equipment3(0.8)(1.1)
(Gain)/loss on disposal of right of use assets3(1.2)0.1
Settlement of share based payments(0.3)(2.7)
Share based payment expense251.82.6
Foreign exchange impact on cash flow hedges1.4–
Decrease/(increase) in trade and other receivables13.2(7.2)
Decrease/(increase) in inventories8.6(3.3)
Decrease in trade and other payables(55.8)(16.6)
Decrease in provisions(6.0)(1.7)
Net cash from operating activities before tax122.4139.7
Tax paid(0.7)(6.8)
Net cash from operating activities121.7132.9
DFS Furniture plc
148
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
27 Net debt
26 June 2022
£m
Cash flow
£m
Other non-cash
changes
£m
25 June 2023
£m
Cash in hand, at bank17.39.4–26.7
Bank overdraft(12.3)12.3––
Cash and cash equivalents (including bank overdraft)5.021.7–26.7
Non-cash changes include the addition of leases within the period of £25.0m (2022: £51.9m), lease remeasurements of £7.0m (2022: £5.4m), disposals of leases of £4.7m
(2022: £2.5m) and the amortisation of capitalised debt issue costs of £0.3m (2022: £0.4m).
28 Related parties
Key Management Personnel
At 25 June 2023, Directors of the Company held 0.4% of its issued ordinary share capital (2022: 0.4%), and a further 0.1% (2022: 0.1%) was held by other key management
personnel. The compensation of key management personnel (including the Directors) is as follows:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Emoluments3.54.0
Share based payments expense0.10.8
Company contributions to money purchase schemes0.10.3
3.75.1
A number of key management personnel hold positions in other companies that result in them having control or significant influence over these companies. One such
relationship was formed during the period, with an entity which the Group already transacted. The terms and conditions of these transactions were no more favourable than
those available, or which might reasonably be expected to be available, in similar transactions with other companies with no relationship with members of key management,
and were conducted on an arm’s length basis.
The aggregate value of transactions related to key management personnel and entities over which they have control or significant influence was £4.3m, and the outstanding
balance at the year end was £0.6m.
From time to time key management personnel or tier related parties may buy goods from the Group. These purchases are on the same terms and conditions as those
entered into by other Group employees or customers.
DFS Furniture plc
149
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
During the period to 26 June 2022 the Group took the decision to exit its operations in the Netherlands and Spain. The cessation of these operations was completed in
the year ended 25 June 2023, with the order book at the point of closure being delivered during this year. The revenues and expenses of the discontinued operations have
therefore been eliminated from the consolidated income statement for the Group’s continuing operations and are shown as a separate single post-tax line item, consistent
with the presentation adopted for the year ended 26 June 2022. Prior to being classified as discontinued operations, these operations were included within the DFS segment
of the Group’s segmental analysis.
Results from discontinued operations:
52 weeks to
25 June 2023
52 weeks to
26 June 2022
Underlying
£m
Non-underlying
£m
Total
£m
Total
£m
Revenue2.0–2.09.0
Cost of sales(1.1)–(1.1)(4.6)
Gross profit0.9–0.94.4
Selling and distribution costs(1.1)–(1.1)(5.0)
Administrative expenses–3.83.8(5.3)
Operating (loss)/profit before depreciation, amortisation and impairment(0.2)3.83.6(5.9)
Depreciation–––(1.5)
Impairment–––(6.0)
Operating (loss)/profit(0.2)3.83.6(13.4)
Finance expenses–––(0.3)
(Loss)/profit before tax(0.2)3.83.6(13.7)
Taxation(0.1)(0.3)(0.4)0.9
(Loss)/profit for the period from discontinued operations(0.3)3.53.2(12.8)
Non-underlying items from discontinued operations:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Impairment of right of use assets–3.1
Impairment of other assets–1.4
Impairment of goodwill and intangible assets–1.5
Other closure (credits)/costs(3.8)5.3
(3.8)11.3
The closure credits in the year relate to the release of provisions made in FY22 for costs associated with the closure of these operations where the actual costs incurred were
lower than had been expected when the provision was made.
DFS Furniture plc
150
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
AT 25 JUNE 2023
continued
Cash flows from discontinued operations:
52 weeks to
25 June 2023
£m
52 weeks to
26 June 2022
£m
Net cash from operating activities(0.6)1.1
Net cash used in investing activities––
Net cash used in financing activities(0.4)(1.4)
Net decrease in cash and cash equivalents(1.0)(0.3)
Cash and cash equivalents at beginning of period1.31.6
Net cash and cash equivalents (including bank overdraft) at end of period0.31.3
30 Subsequent events
Refinancing
On 1 September, the Group successfully completed a refinancing of its £215.0m revolving credit facility, replacing it with a new £200.0m revolving credit facility and £50.0m
of senior secured notes. The £200.0m revolving credit facility is held with a syndicate of banks and matures in September 2027, with the option of a one year extension, and
attracts variable rate interest (credit spread adjusted SONIA plus a margin). The senior secured notes attract fixed rate interest and comprise two tranches: £25.0m maturing
September 2028 and £25.0m maturing September 2030.
Both of the new debt facilities are subject to the same financial covenants as the previous facility, being: 3.0x Net Debt / EBITDA and 1.5x Fixed Charge Cover, and are
assessed on a six-monthly basis at June and December.
As a consequence of the refinancing, non-underlying finance costs of £1.9m will be recognised in the income statement in FY24 comprising £0.8 m in associated
professional fees and the write-off of £1.1m of unamortised issue costs on the previous £215.0m loan.
Restructuring
On 11 September, a consultation process was commenced on the potential closure of the smallest of the Group’s UK factories. If the closure goes ahead, it is expected
to result in non-underlying restructuring costs of approximately £5.5m, including redundancy costs and asset impairment.
DFS Furniture plc
151
Financial Statements
COMPANY BALANCE SHEET
AT 25 JUNE 2023
Note
25 June 2023
£m
26 June 2022
£m
Non-current assets
Investments 2254.5252.7
Amounts due from group companies3275.0205.1
529.5457.8
Current liabilities
Amounts due to group companies4(63.3)(20.1)
Net assets466.2437.7
Capital and reserves
Called up share capital524.125.9
Share premium540.440.4
Merger reserve518.618.6
Capital redemption reserve5359.6357.8
Treasury shares5(10.1)(4.9)
Shares held by employee benefit trust5(6.6)(6.9)
Retained earnings40.26.8
Equity shareholders’ funds466.2437.7
(2022: £10.0m).
board of directors on 21 September 2023 and were
signed on its behalf by:
Tim Stacey
Chief Executive Officer
John Fallon
Chief Financial Officer
Company registered number: 07236769
DFS Furniture plc
152
Financial Statements
COMPANY STATEMENT OF CHANGES IN EQUITY
AT 25 JUNE 2023
Share capital
£m
Share
premium
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Treasury
shares
£m
Shares held
by employee
benefit trust
£m
Retained
earnings
£m
Total equity
£m
Balance at 27 June 202125.940.418.6357.8(0.7)(0.2)52.0493.8
Profit for the period––––––10.010.0
Other comprehensive income––––––––
Total comprehensive income for the period––––––10.010.0
Dividends paid––––––(53.8)(53.8)
Purchase of own shares––––(4.4)––(4.4)
Treasury shares issued––––0.2–(0.2)–
Purchase of shares by Employee Benefit Trust–––––(8.1)–(8.1)
made in respect of share based payments schemes for the Group’s employees. As a consequence of the Company’s share price at 25 June 2023, a value in use calculation
s479A of the Companies Act 2006. DFS Furniture plc will guarantee the debts and liabilities of these entities in accordance with Section 479C of the Companies Act 2006.
25 June 2023
£m
26 June 2022
£m
Amounts due from subsidiary undertakings (non-interest bearing, repayable on demand)275.0205.1
Amounts due to subsidiary undertakings (non-interest bearing, repayable on demand)63.320.1
Share capital
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Number of shares
‘000
Ordinary shares
£m
Ordinary shares of £0.10 each
Allotted, called up and fully paid
At the start of the financial period258,63725.9
Cancelled during the financial period(17,959)(1.8)
At the end of the financial period240,67824.1
On 9 November 2022 17,958,600 ordinary shares which had been held in treasury were cancelled.
DFS Furniture plc
155
Financial Statements
NOTES TO THE COMPANY FINANCIAL STATEMENTS
AT 25 JUNE 2023
continued
Share premium
The share premium account represents the surplus
of consideration received for issued ordinary share
capital over its nominal value. This arose on the issue
of ordinary shares on 11 March 2015.
Merger reserve
The merger reserve arose on the issue of shares in
the Company in exchange for minority interests in
the issued share capital of a subsidiary company on
10 March 2015.
Capital redemption reserve
The capital redemption reserve represents the par
value of cancelled treasury shares.
Treasury shares
share capital into treasury (treasury shares), the
consideration paid, including any directly attributable
incremental costs is deducted from equity attributable
to the Company’s equity holders until the shares are
cancelled, reissued or disposed of.
During the period ended 25 June 2023 21,694,437
shares (2022: 2,585,666) were acquired at a total cost
of £30.9m (2022: £4.4m). 17,958,600 treasury shares
(2022: nil) were cancelled on 9 November 2022. None
of the Company’s own ordinary shares (2022: 63,444)
were used to satisfy employee share based payment
awards. At 25 June 2023 the company had 6,533,700
ordinary shares held in treasury (2022: 2,797,863).
Employee Benefit Trust shares
which are issued for the purpose of satisfying future
employee share based payments awards.
During the period ended 25 June 2023 the Company
acquired and issued no ordinary shares to the
shares were used during the period (2022: 824,009).