Dunelm reports 'another strong year'

Dunelm has reported preliminary results for the 52 weeks to 2 July 2016.

Highlights from the release follow:

* Another strong year, maintaining our record of growing sales and profit every year since IPO in 2006
* Continued delivery across all three areas of the growth strategy:
- In-store like-for-like growth of 1.0% (52 week basis);
- 23.2% growth in home delivery sales (52 week basis), now accounting for 7.0% of total revenue (FY15: 6.1%);
- Six new openings in the year (including two relocations), increasing footprint to 152 superstores; nine new stores contractually committed.

* Progress on eight key initiatives to support the growth strategy and to build a world class operating model in a low cost environment:
- New warehouse opened in Stoke, doubling capacity and providing cost reduction opportunities
- Improved productivity within stores to reinvest into helping customers, improving service, driving sales and to mitigate the cost of introducing the National Living Wage
- Reduction in stock holding by £16.5m (12.4%) through improved retail disciplines

* Strong free cashflow, up 26.9% to £110.4m
- Special distribution during the period of 31.5p per share (£63.8m)
- Recommended final dividend of 19.1p per share (FY15: 16.0p), increasing the full year dividend to 25.1p (FY15: 21.5p), an increase of 16.7% for the full year

John Browett, Chief Executive, commented:

"The business has performed well over the year. Shoppers tell us that they genuinely appreciate the unrivalled depth and value of the Dunelm homewares offer. This has meant we have further cemented our leading position through market share gains, driving sales and profits growth, and increasing returns to shareholders, including a 16.7% increase in total ordinary dividends and a special distribution of 31.5p per share.

"My first year as Chief Executive has been extremely busy and we're working hard on initiatives across the business. Not least, we are investing in our stores to make them much easier to shop, whilst making sure our vast range of product maintains the value for money proposition which lies at the very heart of the Dunelm offer.

"We remain particularly focused on extending the Dunelm offer to more customers and have opened six new superstores in the year. This will be ramped up in the current year with nine planned openings, three of which are in the London area where we are excited by the clear opportunity for growth.

"We continue to outperform the homewares market, and despite potential challenges to the economy over the coming months and the dampening effect on footfall of recent hot weather, we believe that Dunelm's competitive position can come into its own, and are confident of continuing to deliver our growth ambitions."

View the full release here. 

Analyst View

Connor Campbell, a senior market analyst at www.spreadex.com, said:  

"Despite a bevy of better than expected results, including a 7.1% surge in full year revenue and a 6.2% jump in pre-tax profit, investors weren’t particularly fussed with Dunelm’s annual update. The stock ended up sitting flat after the bell, with investors perhaps put off by the prospect of ‘potential challenges over the coming months and the dampening effect on footfall of recent hot weather’."

Image : Imran's Photography / Shutterstock.com 

Source : Dunelm
www.dunelm.com

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