DB:DF0

Stock Analysis Report

Executive Summary

DFS Furniture plc designs, manufactures, sells, delivers, installs, and retails a range of sofas, upholstered furniture, and other living room furniture products in the United Kingdom and Europe.

Rewards

Trading at 44.8% below its fair value

Earnings are forecast to grow 24.07% per year

Risk Analysis

Has a high level of debt

Dividend of 4.06% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has DFS Furniture's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DF0's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.9%

DF0

0.7%

DE Consumer Durables

0.1%

DE Market


1 Year Return

24.9%

DF0

0.3%

DE Consumer Durables

14.1%

DE Market

Return vs Industry: DF0 exceeded the German Consumer Durables industry which returned 0.3% over the past year.

Return vs Market: DF0 exceeded the German Market which returned 14.1% over the past year.


Shareholder returns

DF0IndustryMarket
7 Day0.9%0.7%0.1%
30 Day1.1%0.8%0.2%
90 Day33.3%3.4%3.3%
1 Year31.3%24.9%2.8%0.3%17.6%14.1%
3 Year36.1%12.3%-1.9%-10.1%14.8%4.8%
5 Yearn/a25.0%8.0%22.2%5.4%

Price Volatility Vs. Market

How volatile is DFS Furniture's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is DFS Furniture undervalued compared to its fair value and its price relative to the market?

45.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DF0 (€3.29) is trading below our estimate of fair value (€5.96)

Significantly Below Fair Value: DF0 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DF0 is poor value based on its PE Ratio (29.6x) compared to the Consumer Durables industry average (17.3x).

PE vs Market: DF0 is poor value based on its PE Ratio (29.6x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: DF0 is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: DF0 is overvalued based on its PB Ratio (2.3x) compared to the DE Consumer Durables industry average (1.7x).


Next Steps

Future Growth

How is DFS Furniture forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

24.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DF0's forecast earnings growth (24.1% per year) is above the savings rate (-0.4%).

Earnings vs Market: DF0's earnings (24.1% per year) are forecast to grow faster than the German market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DF0's revenue (3.2% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: DF0's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DF0's Return on Equity is forecast to be high in 3 years time (24%)


Next Steps

Past Performance

How has DFS Furniture performed over the past 5 years?

24.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DF0 has high quality earnings.

Growing Profit Margin: DF0's current net profit margins (2%) are lower than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: DF0 has become profitable over the past 5 years, growing earnings by 24.6% per year.

Accelerating Growth: DF0's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DF0 had negative earnings growth (-5.1%) over the past year, making it difficult to compare to the Consumer Durables industry average (-15.9%).


Return on Equity

High ROE: DF0's Return on Equity (7.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DFS Furniture's financial position?


Financial Position Analysis

Short Term Liabilities: DF0's short term assets (£123.7M) do not cover its short term liabilities (£230.9M).

Long Term Liabilities: DF0's short term assets (£123.7M) do not cover its long term liabilities (£280.0M).


Debt to Equity History and Analysis

Debt Level: DF0's debt to equity ratio (77.3%) is considered high.

Reducing Debt: DF0 had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: DF0's debt is well covered by operating cash flow (23.9%).

Interest Coverage: DF0's interest payments on its debt are well covered by EBIT (5.2x coverage).


Balance Sheet

Inventory Level: DF0 has a low level of unsold assets or inventory.

Debt Coverage by Assets: DF0's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is DFS Furniture's current dividend yield, its reliability and sustainability?

4.09%

Current Dividend Yield


Dividend Yield vs Market

company4.1%marketbottom25%1.3%markettop25%3.6%industryaverage3.0%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: DF0's dividend (4.06%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: DF0's dividend (4.06%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DF0 has been paying a dividend for less than 10 years.

Growing Dividend: DF0's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (131.2%), DF0's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DF0's dividends in 3 years are forecast to be covered by earnings (61.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Tim Stacey (47yo)

1.3yrs

Tenure

UK£607,500

Compensation

Mr. Timothy Giles Stacey, also known as Tim, serves as Group Chief Executive Officer at DFS Furniture plc since November 1, 2018 and served as its Chief Operating Officer since October 19, 2015. Mr. Stacey ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD790.58K) is below average for companies of similar size in the German market ($USD1.17M).

Compensation vs Earnings: Insufficient data to compare Tim's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Timothy Stacey
Group CEO & Director1.3yrsUK£607.50k0.22% £1.5m
Mike Schmidt
Group CFO & Executive Director0.6yrsno data0.0044% £30.8k
Scott Fishburn
Chief Operating Officer0.3yrsno datano data
Russell Harte
Group Technology Director2.1yrsno datano data
Elizabeth McDonald
Group Company Secretary & General Counsel0yrsno datano data
Joanne Shawcroft
Group People Director0.2yrsno datano data
Nick Smith
Managing Director of DFS2.1yrsno datano data
Gill Stewart
Chief Executive Officer of Sofa Workshop2.3yrsno datano data
Peter Jenkins
Chief Executive Officer of Dwell1.3yrsno datano data

1.3yrs

Average Tenure

Experienced Management: DF0's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Timothy Stacey
Group CEO & Director1.3yrsUK£607.50k0.22% £1.5m
Mike Schmidt
Group CFO & Executive Director0.6yrsno data0.0044% £30.8k
Ian Durant
Non-Executive Chairman2.8yrsUK£168.00k0.013% £92.0k
Alison Hutchinson
Senior Independent Director0.4yrsUK£52.00kno data
Jo Boydell
Independent Non-Executive Director1.2yrsUK£31.00kno data
Stephen Johnson
Independent Non-Executive Director1.2yrsUK£29.00kno data
Jane Bednall
Independent Non-Executive Director0.08yrsno datano data

1.2yrs

Average Tenure

52yo

Average Age

Experienced Board: DF0's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

DFS Furniture plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: DFS Furniture plc
  • Ticker: DF0
  • Exchange: DB
  • Founded: 1969
  • Industry: Home Furnishings
  • Sector: Consumer Durables
  • Market Cap: UK£582.678m
  • Listing Market Cap: UK£698.713m
  • Shares outstanding: 212.66m
  • Website: https://www.dfscorporate.co.uk

Number of Employees


Location

  • DFS Furniture plc
  • 1 Rockingham Way
  • Redhouse Interchange
  • Doncaster
  • South Yorkshire
  • DN6 7NA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DFSLSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 2015
DF0DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2015
DFSlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 2015

Biography

DFS Furniture plc designs, manufactures, sells, delivers, installs, and retails a range of sofas, upholstered furniture, and other living room furniture products in the United Kingdom and Europe. As of July 30, 2018, it operated a network of 116 DFS stores, as well as 44 stores with converted warehouse space. The company also sells its products online. DFS Furniture plc was founded in 1969 and is headquartered in Doncaster, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 22:58
End of Day Share Price2020/02/19 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.