Doncaster’s DFS sofa chain has blamed Brexit and this summer’s heatwave for a nosedive in profits.
The Carcroft-based firm, which has scores of stores across the UK, saw full-year pre-tax profits plunge by 48.5% to £25.8 million – its second consecutive year of falling profits.
The news triggered an early morning slide in its share price, falling by 7% to £2.03.
The firm has put the latest decline down to the summer heatwave, claiming it kept shoppers away during critical trading weekends and also continuing uncertainty over Brexit.
It said consumer ‘nervousness’ in the run up to Britain leaving the European Union next March contributed to the plummet in profits.
The firm said: 'Continued economic uncertainty for consumers, compounded by some exceptional hot weather over key trading periods in the final quarter, resulted in sales and profits for the full year falling below our expectations.”
The 50-year old company, which has 116 UK stores and owns the Sofa Workshop, Sofology and Dwell brands, was also hit by delays at Felixstowe port, which has been thrown into turmoil after the botched launch of a new terminal operating system.
This has held up shipments of its made-to-order products and delayed deliveries to customers, which is when DFS records the sale on its books.
Outgoing chief executive Ian Filby, who is retiring next month after an eight year tenure, was downbeat about consumer confidence and Brexit, saying that the results reflected an 'exceptional downturn in market demand'.
'Overall we expect the market to remain subdued into 2019, constrained by political risk and weak consumer sentiment,' he said.
DFS, which is Britain's second biggest furniture retailer after IKEA, began life in 1969 when 24-year-old entrepreneur Graham Kirkham began making and selling furniture above a Doncaster snooker hall and trading as Northern Upholstery.
Kirkham bought Darley Dale based Direct Furnishing Supplies in the 1980s, with the company being rebranded as DFS and in April 2010, the company was sold off to a private equity firm for £500 million.