MFI Furniture hopeful of meeting forecasts

MFI Furniture hopeful of meeting forecasts

	Published : Thu, 01 Dec 2005 17:05 By : Amy Watts Print this Story

LONDON: Britain's troubled furniture retailer MFI Furniture Group Plc. announced it is "on track" and will meet market forecasts for the year ending 25 December 2005. The company, however, said its Howden Joinery business may deliver profits at the lower end of the market estimates.

Analysts had brought down forecasts after the company said in October that there will be small loss before tax and exceptionals for the year.

The company revealed in a trading update 1 December its U.K. retail division had a 15 per cent cut in orders for the last eight weeks ended 26 November. However, this is an improvement on the 31 per cent year-on-year decrease in orders for the period 8 September-2 October.

It said the Howden Joinery division, which sells kitchens to small builders, fared well through the peak autumn period with total sales in the second half going up 8 per cent against the same period last year and up 4 per cent on a same store basis.

The company had sacked its chief executive John Hancock in October and replaced him with Mathew Ingle, formerly heading the Howden Joinery division. Ingle had carried out major changes in the company's strategy. He has decided to exit Howden Millworks in the U.S., a retail joint venture in Taiwan and the Ethan Allen joint venture in the U.K. This may cause a combined loss of 10 million pounds in the current year and there will be exceptional charges to the profit and loss account of 16 million pounds.

Ingle said in a statement that a fundamental review is on in U.K. retail and in the short term "we are managing the business for margin, cost control and cash".

MFI has a net debt of 63 million pounds and it said it is continuing its discussions with lenders.

The company's shares rose 5.3 per cent to close at 74.75 pence in London. Overall, the shares had lost 40 per cent this year.