DFS float gets off to quiet start as investors worry over post-election prospects

DFS Store
DFS Store
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DFS ​Furniture made a muted debut on London’s Stock Exchange as its shares closed flat at the offer price of 255​p.

The 2​5​5p​​​ price tag was at the bottom end of a 245p to 310p range and valued the business at £543m.

​Independent retail analyst Nick Bubb said: “Investors are clearly nervous about DFS’s prospects after the general​ ​election,” referring to predictions that there will be no clear winning party, which could hit consumer confidence.​

“It is hard to spin today’s news that the IPO has been priced at only 255p as a success,” ​he added.

​Doncaster-based ​DFS, which is majority-owned by private equity firm Advent International, has a quarter share of Britain’s ​£3bn upholstered furniture market.

It has 105 stores in the UK,​ ​Ireland and the Netherlands, mainly on retail parks. The group said the offer, which represented 38 per​ ​cent of DFS’s share capital, raised gross proceeds of ​£​98​m, which would be used to reduce debt​ ​and secure cheaper financing.

​The float marks DFS’ return to the London stock market after an absence of more than a decade.

DFS was founded by Lord Kirkham from a single store in Doncaster.

The group was listed on the London market between 1993 to 2004 before Lord Kirkham took it back into private hands.

Chairman Richard Baker said: “I am extremely proud of what has been achieved at DFS since 2010 and excited about what is to come as a public company.”

The move comes after smaller rival ScS floated on the London market in January valuing it at £70m.

DFS competes against rivals such as Furniture Village and Sofaworks.

It posted annual gross sales of £874.8m in 2014, turning in a pre-tax profit of £85.2m.

Advent will keep a 50 to 56 per cent stake and directors will hold 3.2 per cent.