MFI Update

30 September 2008

Galiform is aware that a notice of intention to appoint administrators has been filed by the board of MFI Properties Ltd ("MFI Properties"), the company which holds the leases through which MFI Retail operates its store network. 

Galiform is the guarantor of the rent and associated costs payable under the leases of 46 properties occupied by the MFI Retail operations.  At this stage it is not certain that if administrators of MFI Properties are appointed, liability for all 46 properties will revert to Galiform.

The current aggregate annual net rentals (i.e. gross rent less sub tenant income) payable for all 46 properties would be £14.7m, with associated net business rates of circa £6m and other costs potentially up to £2.5m a year.  

The number of guaranteed leases reduces as the leases expire, with more than half expiring by the end of 2014.  The profile of properties remaining and the net annual rent and rates (current values) for the associated leases, before any mitigating action is taken, is shown below.



1 Jan 2012

1 Jan 2015

1 Jan 2020

1 Jan 2025

Number of properties






Net annual rent and rates, £m







Galiform has already engaged in extensive consultation with external property experts.  As a result, it has developed a detailed and thorough property-by-property plan to seek to mitigate the financial impact of it becoming liable for payments in relation to the guarantees, including negotiating the early ending of leases with landlords or finding new sub-tenants.

In considering its working capital and financing requirements, Galiform has taken into account the pre-mitigation cash costs of all the guaranteed leases and the Board is confident of the adequacy of the Group's available funding. 

The Board is also confident that Howden Joinery, through its national network of over 450 depots and more than 230,000 registered trade customers, is well placed to service any local market opportunities that may arise as result of any restructuring of the MFI business.


Investors/analysts: Media:
Gary Rawlinson Brunswick Susan Gilchrist
Head of Investor Relations Anna Jones
+44 (0)207 535 1127
+44 (0)7989 397527
+44 (0)207 404 5959


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