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DFS cancels dividend and closes all operations in UK, Ireland and Spain

Published: 09:34 25 Mar 2020 GMT

DFS Furniture -

DFS Furniture PLC (LON:DFS) has cancelled payment of its interim dividend and closed all of its showrooms, manufacturing and distribution operations in the UK, Ireland and Spain in response to government restrictions to limit the spread of coronavirus.  

The sofa specialist will continue to take online orders but is suspending deliveries.

With immediately available cash resources of approximately £70mln, the company could remain in hibernation for over four months, as it calculated operating cash outflow will be around £15mln per month from April until stores re-open after mitigating measures have been put in place.

Cancelling the interim dividend will save around £8mln of cash.

DFS also have a customer order book of around £185mln from orders taken in recent months that would be expected to result in around £125mln of net cash receipts upon delivery to customers' homes, most of which would be used to fund outstanding trade creditors of circa £100mln as at 24 March.

With support promised by the UK government's coronavirus job retention scheme, DFS intends to keep staff employed “for as long as possible”.

And, as well as the 12-month business rates holiday for retail properties that starts in April, discussions are being held with landlords to improve payment schedules. 

Marketing expenditure will be significantly reduced, discretionary capital and operating expenditure paused, including new openings, and usage of consultants and contractors, and hiring and training, are being frozen.

DFS said it was agreeing with senior management to reduce their pay while this shutdown continues, and deferring all annual salary reviews.

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