LONDON (AFX) – MFI Furniture Group (Nachrichten) PLC has slumped to a first half loss and said talks about the possible sale of its struggling eponymous UK Retail chain are ‘progressing’.


The group revealed on May 19 it had received ‘expressions of interest’ in all or part of its 200-store UK Retail business from a number of third parties.

Reports have identified private equity groups Apax, Argyll Partners and Merchant Equity Partners as potential buyers.

For the 24 weeks to June 10 MFI made a loss before tax and exceptional items from continuing operations of 5.7 mln stg compared to a profit of 19.5 mln stg last time as total revenue fell 11.8 pct to 597.1 mln stg.

The loss before tax after exceptional items from continuing operations was 45.0 mln stg compared to a profit of 57.0 mln stg last time.

UK Retail saw its underlying operating loss widen to 14.2 mln stg from 0.3 mln stg last time on sales down 25.1 pct to 311.8 mln stg.

The 300-store Howden Joinery business made an underlying operating profit of 50.9 mln stg — only a slight fall from 51.5 mln stg last time, despite the absence of a June promotion this year and the acceleration of the depot opening programme. Its revenue increased 5.5 pct to 272.9 mln stg.

The group’s Supply division saw underlying operating losses widen to 25.0 mln stg from 17.4 mln stg.

As at June 10 MFI had net cash of 92.9 mln stg, compared with net

borrowings of 55.5 mln stg at the end of 2012. No dividend was proposed compared to a 2 pence payout last time.

MFI also announced the appointment of Will Samuel as a non-executive director with immediate effect and as chairman designate. He will succeed the the retiring chairman Ian Peacock during the next few months.

MFI shares closed Wednesday at 106-1/4 pence, valuing the business at 667 mln stg.

‘Our first task was to stabilise the group, which we achieved, and we now have greater visibility of the three businesses (UK Retail, Howdens, and Supply),’ said chief executive Matthew Ingle, who replaced the sacked John Hancock last October and immediately launched a strategic review.

The review has so far seen UK Retail cease trading from 13 stores, while seven have been relocated. Factories at Stockton and Scunthorpe and three regional delivery centres have also been closed.

‘In a rapidly changing market place, Retail remains challenged, but we are

committed to finding a way forward, even if it remains a long road ahead. Supply is changing to align itself with the market. Howdens continues to perform

well and we are accelerating our expansion programme,’ said Ingle.

Overall, we have been working hard and made progress, but we have much more to do.’

In February MFI reported a year to Dec 25 2012 loss before tax and exceptionals of 0.6 mln stg compared to a profit of 54.5 mln stg in the previous year.

Before today’s statement analysts were forecasting a year to Dec 25 2013 consensus underlying pretax profit of about 14 mln stg.

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