Settlement with HMRC

MFI Furniture Group PLC
26 January 2006




26 January 2006


                            MFI Furniture Group Plc
           Structural Guarantee Settlement with HM Revenue & Customs

MFI is pleased to announce that it has this morning reached a settlement with HM
Revenue & Customs over its VAT dispute on its insurance-backed structural
guarantees. As at the last published balance sheet date (June 2005), the Group
had paid all of the relevant VAT and this was shown as a receivable on the
Group's balance sheet of £60.5m from HM Revenue & Customs without any provision.

Taking into account the cost, timing, resource and risk involved with
litigation, both parties have agreed to settle, with HM Revenue & Customs paying
£21.8m to MFI. As a result MFI will write off the balance of the receivable of
£38.7m in the accounts prepared for the year to 24 December 2005. It is
anticipated that the cash will be received in mid February.

Enquiries:

Susan Gilchrist            Brunswick              020 7404 5959
Fiona Laffan
Anna Jones




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