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Last Updated: Tuesday, 16 November, 2004, 11:39 GMT
MFI tackles supply chain problems
MFI

Shares in MFI Furniture have jumped by more than 5% after it reassured investors that problems with its new supply chain system were being solved.

In September, the company issued a profit warning as delivery problems meant some orders from customers were failing to reach their destinations.

After that rumours began that Argos-owner GUS or an investment vehicle could be about to launch a bid.

MFI looked vulnerable after losing 40% of its stock value in a year.

At 1130 GMT MFI shares were up 5.78% at 119p.

Howden shines

Progress in sorting out its distribution problems will be welcomed by potential bidders, analysts say.

"It still all hinges on the Christmas sales, but a bidder, if there is one, would be encouraged by this update," said Assad Malic at broker Evolution Beeson Gregory.

MFI announced that its trading performance over the current year was in line with forecasts, with its lucrative Howden Joinery business, which sells kitchens and carpentry products, outshining the rest of the group.

Meanwhile, MFI's UK retail business is suffering under the pressure of stiff competition from GUS's Argos and Kingfisher's B&Q unit.

Supply chain hiccups accounted for lower-than-expected sales of kitchen cabinets at its Hygena and Currys division, the company said.

Now, MFI estimates it will take about a year for the supply problems to be fully resolved.

"Frankly, it's going to be probably another 12 months to get all those efficiencies properly installed in the business," said chief executive John Hancock.


SEE ALSO:
MFI shares rally on bid rumours
04 Nov 04 |  Business
MFI shares dive on delivery woes
09 Sep 04 |  Business
Sales slump hammers MFI profits
22 Jul 04 |  Business
MFI shares hit by declining sales
20 May 04 |  Business


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