Dunelm Group plc, the UK’s leading homewares retailer, today announces its preliminary results for the 52 weeks to 1 July 2017.
- Sales growth of 8.5% (2.3% excluding Worldstores) in challenging and subdued Homewares and Furniture markets
- Share of Homewares market increased to 7.9% (2016: 7.8%)
- Acquisition of Worldstores in November 2016 creates a springboard for online growth and range development; business plan for accelerated growth established and integration is well under way
- EBITDA of £142.2m (pre-exceptional items), down 7.8% year on year reflecting investment for growth and consolidation of Worldstores trading losses
- Earnings per share reduced to 36.1 pence (fully diluted), reflecting primarily the costs of the Worldstores acquisition, both expected trading losses and exceptional costs
- 3.6% increase in full year dividend to 26.0 pence per share
- Encouraging start to FY18 with good LFL sales growth in the first two months
Andy Harrison, Chairman, commented:
“Dunelm has made good strategic progress over the year, most notably with the acquisition of Worldstores, which moves us closer to our goal of being the biggest and best multichannel homewares retailer in the UK. Over the medium-term we are aiming to double our sales to £2bn, with 30%-40% from our increasingly important online channel.
“The Worldstores acquisition provides a step change in our online scale, product range and capability. Our reported profit for the year reflects an investment of nearly £28m in the acquisition. The integration is going well and we remain confident in the benefits that it will generate.
“We expect the trading climate to remain challenging with the disposable income of UK consumers under pressure. Nevertheless, we have a full programme of management actions underway to further improve the Dunelm customer proposition, both online and in-store, increase our business efficiency and support our colleagues.
“Sales in the first two months of the new financial year have started positively, with good LFL sales boosted by favourable weather comparatives. We expect to open a total of 8 new stores in the first half of the year of which 4 are already open. An encouraging start.”
Fiona Cincotta, a senior market analyst at www.cityindex.co.uk commented:
Despite recent management upheaval, Dunelm still appears to be coping with the subdued retail environment reasonably well.
Encouragingly, the sales momentum it enjoyed in its fiscal fourth quarter has continued into August and September and new store openings are on track.
The final dividend has been nudged up by a cautious 2.1%, perhaps portending to the challenging market outlook.
The ability to executive on strategy is becoming more important as the market stutters, so the sooner the company can find a replacement CEO the better.