Strong Interim Results At Dunelm

• Strong performance and seizing the opportunity for sustainable growth 

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, today announces its interim results for the 26 weeks to 31 December 2022. 

Highlights

• Strong sales growth of 5%, with total sales 43% higher than H1 FY20 (pre-pandemic), as we helped customers manage their household budgets
  
  
• Customers responded well to the Dunelm offer across our categories, with a significantly increased range on Dunelm.com, where we launched c.10,000 new SKUs
  
  
• 160bps market share gain in homewares and continued share gains in furniture⁴
  
  
• Active customers 5.7% higher than last year⁵, with 4.8% increase in shopping frequency⁶
  
  
• Three new stores opened, including one relocation
• Tripled our 'Delivering Joy' campaign, with over 60,000 Christmas gifts donated to local causes

Financial highlights

• Tight commercial discipline and operational grip delivered gross margin of 51.1%

• PBT of £117.4m, down on the prior year as expected, reflecting impact of Sale timing and strong post-pandemic demand in the prior year, and inflationary impacts

• £17m of investment in digitalisation, capability and capacity to support future growth opportunity

• Free cash flow of £102.1m, an excellent cash conversion of operating profit of 84%

• Interim dividend of 15p (FY22 H1: 14p), an increase of 7.1%

• Special dividend of 40p declared to return to target leverage range of 0.2× - 0.6× net debt:EBITDA⁷ 

Outlook and current trading 

• Strong performance in the first half and a strong Winter Sale

• Whilst customers have been resilient to date, the consumer outlook remains unpredictable

• Our expectations for FY23 PBT remain unchanged⁸

Nick Wilkinson, Chief Executive Officer, commented:

"We are all learning to live in a new, complex and rapidly evolving economic reality. Recognising this, our focus has been on ensuring that we continue to offer outstanding value to our savvy customers through a proposition which is committed to quality, at the right price, across an expanding range of relevant products. We believe that this is why we have continued to grow our sales, customer numbers and market share.   

"In this environment, agility, creativity and innovation are more important than ever and we have endeavoured to make every pound count, both for ourselves and for our customers, helping to mitigate the impact of inflation. While we do this, it is important that we also maintain our long-term thinking, invest for sustainable growth and continue to ensure we are in a position to seize the significant opportunities ahead of us.   

"Much like during the pandemic, our customers, colleagues and the communities we operate in will remember how businesses behaved when times were tough, and we are confident that our approach of offering outstanding value and choice for all will enable us to - once again - emerge from this challenging period stronger than ever." 

1 Digital includes home delivery, Click & Collect and tablet-based sales in store

2 Free cash flow is defined as net cash generated from operating activities less capex (net of disposals) and business combinations, net interest paid (including leases) and loan transaction costs, and repayment of principal element of lease liabilities. A reconciliation of operating profit to free cash flow is included in the CFO review

3 Excluding lease liabilities. Full definition provided in the table of alternative performance measures in the CFO review

⁴ GlobalData UK homewares and furniture markets, January 2022 to December 2022. Furniture excludes kitchen and bathroom furniture

⁵ Unique active customers who have transacted at least once in the 12 months to December 2022. Management estimates using Barclays data

⁶ Number of visits per retained customer in the 12 months to December 2022. Retained customers defined as those who have shopped with Dunelm in the 12 months to December 2021 and the 12 months to December 2022. Source: Barclays

⁷ Operating profit plus depreciation and amortisation of property, plant and equipment and intangible assets plus loss on disposal and impairment of property, plant and equipment and intangible assets plus depreciation on right-of-use assets

⁸ At our Preliminary results in September 2022, we confirmed that we were on track to deliver FY23 PBT in line with analysts' expectations. In September 2022, the company compiled consensus average of analysts' expectations for FY23 PBT was £178m, with a range of £130m to £193m. The current company compiled consensus average of analysts' expectations for FY23 PBT is £176m, with a range of £131m to £188m

Source : Dunelm

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