DFS looks to boost borrowing capacity as online orders rise
DFS is in ‘advanced stages’ of being able to borrow another £60m-£70m and is considering a rights issue.
It said it was in talks with its existing bankers to add to its £250m facility. In addition, it is preparing for a possible issue of shares up to 19.9% of its existing capital to boost its balance sheet.
It says it has had successful discussions with landlords and suppliers to reduce monthly outgoings and now expects this to be less than £14m a month, down from its previous forecast of £15m.
Since 25 March it has sold £7m of sofas online.
DFS and Sofology are continuing to receive deliveries from Far East suppliers and Dwell has been sending accessories to customers.
It says it will ‘to restart sofa deliveries once it is clear there is a safe and workable approach for two-person installations into customer homes.
‘The combination of the proposed additional financing together with the operating cost mitigation measures is expected to, when agreed, 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.’