(Alliance News) - DFS Furniture PLC on Wednesday said it has seen a rise in online sales, as it announced a placing amongst other measures taken to maintain liquidity.
The sofa retailer said it intends to issue new shares of up to 19.9% of its existing share capital through a placing and subscription.
The stock closed 2.3% lower at 129.00 pence each on Wednesday in London. At the current share price, the placing of 41.7 million outstanding shares would be worth around GBP53.8 million.
DFS said the placing will be carried out through an accelerated bookbuild with Jefferies International Ltd and Peel Hunt LLP acting as joint global coordinators, joint bookrunners and corporate brokers. Barclays Bank PLC and BNP Paribas are acting as joint global coordinators and joint bookrunners.
Members of the executive team - including Chair Ian Durant, Chief Executive Tim Stacey, Chief Financial Officer Mike Scmidt - have agreed to subscribe for shares worth a total of GBP445,000
The new cash will be used to strengthen the company's balance sheet, working capital and liquidity position in the event the lockdown period continues through to December followed by a historically weak sofa market.
DFS said it currently has a GBP250 million revolving credit facility maturing in August 2022 - which provides immediately available cash of GBP70 million - and added that it has received credit approval for a new 12-month bank facility of GBP70 million with its existing lenders.
Other steps taken to preserve liquidity include furloughing 5,000 employees, reducing board members' pay by 20%, rephasing supplier payments and securing tax reductions. The company said cash operating costs during the lockdown are now expected to be less than GBP14 million per month.
"The mitigating actions we have taken in response to Covid-19, alongside the new financing arrangements and placing announced today, significantly increases the financial resilience of DFS for the months ahead. While the outlook remains uncertain, DFS is well placed to navigate the coming months and the board remains positive about the long-term prospects of the group," said Chief Executive Tim Stacey.
Separately, DFS said that while its showrooms and manufacturing and two-man distribution operations in the UK, Ireland and Spain remain closed and deliveries remain suspended, online sales have risen by 24% over the period from March 25 to April 19. Subsequently, its order book has risen to GBP194 million as at April 19 from GBP185 million on March 25.
By Ife Taiwo; ifetaiwo@alliancenews.com
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