Line drawn under last year's troubles
MFI Furniture Group was at pains to emphasise improvements made to its supply chain and customer service levels since Christmas as it announced its interim results.

Group sales for the 24 weeks to June 11 were up 7.7 per cent to£757 million, with revenues from Howden Joinery contributing much of the gains. The operation increased sales by 14 per cent to£259 million.

MFI announced that it is continuing a massive expansion programme of its Howden business across the US and mainland Europe.

The UK retail business fared less well, with a 3 per cent sales increase and net orders down 2 per cent. However, the division still makes up the majority of the group's revenues, clocking up£429 million for the reported period. Pre-tax profit was£58.5 million, up from£30.1 million a year ago. However, exceptional costs, which include costs related to supply chain disruption, UK redundancies and the closure of the Hygena at Currys business reduced this to£22.9 million.

The retailer said pre-Christmas supply chain problems caused by inadequate systems had been solved. MFI added that its home delivery error rate has been reduced to 5 per cent, compared with 12 per cent before new systems were put into place. This has enabled the retailer to tighten up service levels with a customer service charter and a stiffer disciplinary process.

The board said it had strengthened the group executive committee with the appointment of former B&Q trading director Andrew Livingstone, to take trading responsibility for the UK retail division.

Group chief executive John Hancock said: 'Following a difficult period, the group is now making progress, albeit in a highly competitive marketplace. The first half has seen another strong performance from Howden. We are confident that the supply chain is stable and we remain focused on rebuilding profitability in the UK retail division, notwithstanding the tougher conditions in our markets. We continue to manage costs and gross margins against the background of what remains a competitive market.'