MFI shares plunge after £45m loss

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Furniture retailer MFI's shares have fallen 16% after the firm revealed that it had sunk £45m into the red.

Underlying pre-tax losses for the six months to June came in at £5.7m, but redundancies and factory closures meant a one-off hit of £39.3m.

MFI added it was in talks about selling its stores as part of a shake-up aimed at revamping the struggling business.

The company also named Will Samuel to replace chairman Ian Peacock, who has been in the post for six years.

"In a rapidly changing marketplace, retail remains challenged, but we are committed to finding a way forward, even if it remains a long road ahead," said chief executive Matthew Ingle.

Shares in the group sank to 88.75 pence in morning trading on the London market following the announcement.

Earnings hit

Revenue from the group's retail unit sank 25.1% to £311.8m during the period, pushing overall group revenues 11.8% lower to £597.1m.

One bright spot was the firm's Howden Joinery business - which supplies trade goods to builders and joiners - where profits climbed 5.5% to £272.9m.

As a result of its success, Howden, which currently trades from more than 300 branches, expects to add a further 20 depots and extend nine others.

"With the trend in the market away from 'DIY' to 'done for you' and extending the geographic coverage of the business, scope for 500 depots in the UK and possibly more is foreseen," MFI said.

Since the start of the year, MFI has been undergoing a restructuring drive which has seen it close 13 retail stores, sell its Sofa Workshop chain and shed more than 1,000 jobs since the start of the year.