Upholstered furniture retailer DFS has successful refinanced the business after reporting a strong first half, it has been announced today.
EBITDA increased 9.9 per cent to £31.1 million in the 26 weeks ended January 26th 2013 as higher volumes positively impacted margins while sales rose 7.6 per cent to £319.4 million.
“Since the end of the half year we have completed a successful refinancing of the business through a £310 million bond issue on March 8th 2013,” DFS CEO Ian Filby explained.
“This has permitted us to refinance in full the outstanding 9.75 per cent bond due 2017, as well as making a payment to our shareholders and reducing our blended cost of borrowing to circa 7.50 per cent.
“This establishes a more efficient capital structure for the business going forward.”
Opening three new stores during the period in Stockport, Stirling and Cork, DFS also relocated its Cannock store to a new site and, since the end of the half year, also opened a new store in Kent.
Enhancing its physical stores is one part of an expansion plan which also incorporates online growth and the retailer has built its multichannel presence over the half, launching its sofa and room planner app.
In a further indicator of its financial strength, the retailer signed a deal with a major financial institution in the UK to ensure that customers can access interest-free credit while “providing additional security of supply for this important part of the DFS offer to consumers.”
Commenting on the group’s performance, Filby said:“We are pleased with our progress in the first half of 2012/13, continuing the positive performance of the second half of last year.
“This is testimony to the strength of our brand, the effectiveness of our marketing and the success of our expansion strategy, both online and through profitable new store development.
“Our good performance in the year to date, in a challenging market place, continues to underline the strength of DFS as the UK market leader in upholstered furniture.
“We remain confident that we have the right strategy, proposition and team in place to achieve another successful year of progress for DFS.”