20th Apr 2020 12:15
(Alliance News) - DFS Furniture PLC on Monday announced a planned equity raise amongst other measures to maintain liquidity amid the Covid-19 outbreak as it noted a jump in online sales.
The furniture retailer said it is planning an equity fundraise through the placing of up to 19.9% of its existing share capital.
The stock was trading 11% higher at 145.95 pence each on Monday morning in London. At the current share price, the placing of 41.7 million outstanding shares would be worth around GBP60.8 million.
DFS stated that in addition to cutting costs and reducing its monthly cash outflow to less than GB14 million until the business fully reopens, it is in advanced stages of securing a debt facility of between GBP60 million to GBP70 million with its lenders to add to its existing GBP250 million bank facility.
In March, DFS cancelled its interim dividend of 3.7 pence per share, saving it GBP8 million. It pulled the opening of six new showrooms scheduled for 2021, "significantly" cut marketing spend. It said that in addition to freezing all recruitment and reducing the use of consultants and contractors, "senior leaders" would take pay cuts and defer annual salary reviews.
As at March 24, the company had available cash resources of GBP70 million.
Separately, the company said that from March 25 until April 17, online sales from its website shot up by 20% and its order banks grew to GBP192 million from GBP185 million.
It stated that it has appropriate measures in place for warehouse activities to continue, adding that it intends to restart sofa deliveries as soon as two-person installations at customer homes becomes feasible.
"The combination of the proposed additional financing together with the operating cost mitigation measures is expected to give the group significant liquidity to see through an extended lock-down. The board is confident that the group can navigate the Covid-19 crisis and deliver its strategy over the longer-term when the trading environment normalises."
By Ife Taiwo; [email protected]
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