FD says cost cuts are ‘expected’ after MFI sale


MFI would consider using new IT systems and outsourcing if the company
decides to downsize its accounting function following the sale of its retail

With the completion of its deal to sell its retail arm to Merchant Equity
Partners to be finalised over the next months, FD Mark Robson said that the
split would leave MFI, to be renamed Galiform, a ‘simpler entity’.

Robson said that cost savings ‘were expected’ of the new group, and
restructuring support functions, such as finance, would be an option.

‘We will look at IT opportunities and outsourcing if appropriate,’ said
Robson. However, he stressed there were currently no plans to do so.

The group has previously struggled with its IT infrastructure, which hit the
company’s supply chain and led to the departure of then FD Martin Clifford-King.

Robson added that the deal had enabled the group to amend its banking
covenants and would be able to draw on more financing of required, having sold
off its struggling retail arm, and managed to keep in place its deal deficit
funding deal with trustees.

‘It’s not a refinancing as such, although convenant amendments have been made
as net assets have been reduced, but we can draw more from the facility if

As part of the sale package, MFI will pay £8m into the pension deficit
annually for ten years, and will pay MEP £126m as a ‘dowry’. It expects to post
a net exceptional loss of £180m on the deal.

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