Following the announcement that the UK’s largest upholstery retailer DFS returned to the stock market at the start of March, the next step for the home retailer involves Lloyds leading a banking syndicate, which has provided the company with £230m funding.
The financial deal involves a £200m term loan to refinance the company’s existing borrowings, alongside a £30m revolving credit facility. The £30m will provide the company with day to day working capital.
The news follows DFS recently being listed at 255p on the stock exchange. HSBC, RBS, Barclays, UBS and Jeffries are also involved in the syndicate. Richard Townsend, Relationship Director at Lloyds Bank Commercial Banking is confident that the move will be a success:
“DFS has been on a steady upward trajectory in recent years, with economic confidence and a recovery in the housing market leading to increased consumer spending”.
Rightmove confirmed the growth in property prices, with a 3.2% increase in homes being listed for sale in the last 30 days. With more people moving, furniture good sales are at an all time high. Helen Dickinson, Director General of the British Retail Consortium said:
”Furniture was the second largest contributor to growth in February and remained the fastest growing category on a 12-month basis”. This is great news for DFS which is already the UK’s largest upholstery retailer.
In its annual results up to November 1 2014, DFS recorded revenues of £675m, providing Lloyds with the confidence to back the retailer.
“We have worked closely with the management team for several years and are pleased to support them during the company’s next stage of growth” added Townsend.
Though DFS made a ‘safe’ return to the stock market last week, the financial backing will provide shareholders with extra confidence to invest in the company’s future.