DFS revealed it has successfully raised £64m through a share placing in a move that will “significantly increase its financial resilience” amid the ongoing pandemic.
In addition, the furniture retailer also received credit approval for a new 12-month bank facility of £70m from its existing lending banks.
This new bank facility is intended to cover the group’s working capital unwind and will later be repaid once deliveries resume.
It comes after the retailer completed a placing of 42 million shares, representing 19.9% of its issued share capital.
A total of 42,309,457 shares were placed by existing and new investors at a price of 150 pence per share, while a further 296,662 shares were contributed in aggregate by the group’s directors and members of its senior management team, including the chairman, CEO and CFO.
In its latest update, the retailer said that the lockdown was having a “very significant impact” on the group’s business.
Nonetheless, DFS assured that its cost saving and deferral measures, as well as the share placing and bank financing, will “make the group significantly more resilient”.
It added that its operating model remains “strong” and is reinforced by a “flexible” cost base, as well as ongoing actions to drive efficiencies in operating overheads and marketing spend.
The retailer also said it hoped to fulfil its order bank quickly once lockdown ends, with a third of its order book either in stock or in transit from suppliers.
Tim Stacey, CEO of DFS, said: “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.
“Alongside these actions, we also greatly appreciate the support and efforts from our loyal employees, committed suppliers and understanding landlords.”
He added: “Working together, we have made as much progress as possible to navigate these challenging times.
“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.”