Trading Update

RNS Number : 9947U

Dunelm Group plc

08 January 2013

 



8^th January 2013

TRADING UPDATE

26 weeks to 29^th December 2012

Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, issues the following trading update in respect of the 26 week period to 29^th December 2012.

Revenue

Group revenue for the period was:

	H1: FY13	H1: FY12
Total sales	£340.1m	£299.9m
Total sales growth	13.4%	8.8%
LFL sales growth1	2.2%	1.1%

Total revenue for the half year grew by 13.4%, benefitting from the Group's continuing portfolio development programme. This programme included 10 superstore openings, including one superstore relocation and the reopening of our Coventry superstore after a major fire in 2011.

Like for like sales for the half year grew by 2.2%. LFL sales growth in the second quarter was 1.6%, despite two fewer days of winter sale activity compared with the prior year. LFL sales growth for both the half year and the second quarter was stronger than for the homewares market, as measured by the BRC home textiles index.

Gross Margin Percentage

Despite the dampening effect of our strategic price investment through our "New Lower Prices" campaign, gross margin for the half year is estimated to have improved by 30 basis points compared with the prior year. With a number of initiatives contributing positively to gross margin, we anticipate that year on year growth will strengthen further over the remainder of the financial year. 

Strategy Progress

The total number of superstores trading at the period end was 123. A further six new store opportunities were committed as at the period end², of which four are anticipated to open in the second half taking the number of store openings for the full financial year to 14³. Our medium term target remains to operate from 200 superstores across the UK.

We have seen continued progress in our multi-channel business which now represents approximately 4% of revenues.

Financial Position

The Group remains strongly cash generative with closing net cleared funds at bank of £49.7m, after continued investment in the business and the return of £65.8m excess capital to shareholders during the period.

Commenting on Dunelm's performance, Nick Wharton, Chief Executive, said:

"Dunelm has delivered another strong trading performance in the last half year, continuing to gain market share on a like for like basis, while strengthening its customer proposition and adding 10 new superstores. The Board anticipates that profit before tax for the half year will be in the range of £59 - 60m.  

"As we annualise our exceptionally strong comparative performance in the final quarter of last financial year, we anticipate that sales growth in like for like stores will become much harder to achieve in the remainder of the current financial year.  Nevertheless, with a significant new store growth opportunity and an exciting multi-channel agenda in place, the Board remains confident in the longer term growth prospects for the business."

For further information please contact:

Dunelm Group plc	0116 2644 356
Nick Wharton, Chief Executive
David Stead, Finance Director
MHP Communications	020 3128 8100
John Olsen / Simon Hockridge

Forthcoming Newsflow.

Dunelm will release its interim results on 12^th February 2013. There will be a presentation for analysts at 9.30am at the offices of UBS, 1 Finsbury Avenue, London EC2M 2PP. Those analysts who wish to attend are requested to contact Naomi Lane of MHP on the above number or at [e-mail]. A copy of the presentation will be made available on the Dunelm website.

Notes

1.   Like for like sales represent revenues from stores trading for at least one full financial year prior to 30^th June 2012 and exclude stores with significant change of space in the current or previous financial year.

2.   The committed pipeline of six stores includes relocation of two existing under-sized superstores.

3.   The net increase in superstore numbers over the financial year is expected to be 11, as the total of 14 openings includes two relocations and the Coventry reopening. The total number of superstores at year-end is therefore expected to be 126.

4.   Quarterly sales and margin analysis:

	Year to 29th June 2013
	Q1	Q2	H1
Total sales	£151.8m	£188.3m	£340.1m
Total sales growth	+13.8%	+13.1%	+13.4%
LFL sales growth	+3.0%	+1.6%	+2.2%
Gross margin growth	+40bps	+20bps	+30bps*

        ^*estimated

	Year to 30th June 2012
	Q1	Q2	H1	Q3	Q4	H2	FY
Total sales	£133.4m	£166.5m	£299.9m	£154.1m	£149.7m	£303.8m	£603.7m
Total sales growth	+5.3%	+11.7%	+8.8%	+10.7%	+21.2%	+15.6%	+12.1%
LFL sales growth/(decline)	-2.0%	+3.8%	+1.1%	+0.6%	+10.4%	+5.7%	+3.1%
Gross margin growth	+50bps	-20bps	+10bps	+30bps	+80bps	+50bps	+30bps

Notes to Editors

Dunelm is market leader in the £11bn UK homewares market. The Group currently operates 132 stores, branded Dunelm Mill, of which 123 are out-of-town superstores and 9 are located on high streets, and an on-line store, to be found at www.dunelm-mill.com. 

Dunelm's "Simply Value for Money" customer proposition offers industry-leading choice of quality products at keen prices, with high levels of availability and supported by friendly service. Core ranges include many exclusive designs and premium brands such as Dorma, and are supported by a frequently changing series of special buys. The superstore format provides an average of 30,000 sq ft of selling space with over 20,000 products across a broad spectrum of categories, extending from the Group's home textiles heritage (bedding, curtains, cushions, quilts and pillows) to a complete homewares offer including kitchenware and dining, lighting, wall art, furniture and rugs. Dunelm is one of the few national retailers to offer an authoritative selection of curtain fabrics on the roll, and owns a specialist UK facility dedicated to producing made to measure curtains.

Dunelm was founded in 1979 as a market stall business, selling ready-made curtains. The first shop was opened in Leicester in 1984 and over the following years the business developed into a successful chain of high street shops before expanding into broader homewares categories following the opening of the first Dunelm superstore in 1991.

Dunelm has been listed on the London Stock Exchange since October 2006 (DNLM.L) and has a current market capitalisation of approximately £1.3bn.

 

END

 

 

MSCBRMATMBJMBFJ