Furniture Retailer Plans Equity Raise Amid Crisis

  • DFS seeking £60m to £70m funding to supplement existing bank facility
  • Online gross sales up by 20.2% between 25 March and 17 April
  • Order banks increased to £192m
  • Plans to restart sofa deliveries when safe approach for two-person installations is established
  • DFS confident in navigating COVID-19 crisis and delivering strategy post-lockdown

DFS, the furniture retailer, is in advanced stages of negotiating an additional debt facility of £60m to £70m with its existing lending banks. This funding will cover near-term working capital needs until sofa deliveries can resume after lockdown. The company also plans a possible non preemptive equity issue of up to 19.9% of its share capital to strengthen its balance sheet and provide resilience for the disrupted trading environment. DFS has reduced monthly cash operating costs, now expected to be less than £14m per month until operations reopen. Online sales have surged by 20.2% between 25 March and 17 April, with order banks increasing to £192m from £185m in the same period. The company plans to restart deliveries when a safe approach for two-person installations is established. DFS remains confident in navigating the COVID-19 crisis and delivering its strategy post-lockdown.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about DFS’s efforts to secure additional funding during the pandemic, its ongoing operations, and its plans for resuming business once the lockdown is lifted.
Noise Level: 3
Noise Justification: The article provides relevant information about DFS seeking additional debt facility during the pandemic and its efforts to manage cash flow and operating costs. It also mentions the increase in online sales. However, it lacks analysis or exploration of long-term trends or consequences of decisions on those who bear the risks.
Financial Relevance: Yes
Financial Markets Impacted: DFS, furniture retail industry
Financial Rating Justification: The article discusses DFS’s efforts to secure additional debt facility and its impact on the company’s financial situation during the pandemic, as well as the potential equity issue. It also mentions the company’s online sales performance and plans for resuming operations, which can affect the furniture retail market.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk