DFS Furniture has seen a 16.2% fall in half-year profit due to rising costs.

The British furniture group, which has a store at Cheltenham's Gallagher Retail Park, posted an underlying profit before tax of £7.1 million in the six months to 25 December, down from £23.3 million a year ago.

Tim Stacey, group chief executive, said: "I'm pleased to report that the group has extended its long track record of achieving market share gains in a challenging market to what are now record levels. We expect our profit for the year to be between £30m-£35m in line with external expectations."

He added: "Profit margins have reduced over the last year due to a combination of significant cost increases and our commercial strategy to ensure that we continued to offer great value for customers in an environment where consumer discretionary spend was under pressure.

'We have, however, improved our gross margins in the first half of this year from H2 of FY22 and further still in the second half to date through product innovation and selected retail price increases. Cost headwinds are reducing and in some cases reversing and we expect our upward gross margin trajectory to continue as we execute our margin build back plan.

"At our capital markets day in March 2022 we set out our ambitions to grow revenues to £1.4bn and operate at an 8%+ PBT margin generating post tax free cash flows of 75%+. We continue to target that level of financial performance and have solid plans in place to deliver this."