(Alliance News) - Curtains and bedding seller Dunelm Group PLC on Wednesday reported a double-digit increase in revenue in both its final quarter and full financial year, and said it expects profit to jump by around 22%.
The stock was 1.0% higher in London in early trade at 896.10 pence a share.
The homewares retailer said like-for-like revenue for the 13 weeks to June 29 increased by 15% to GBP244.5 million, reflecting strong underlying growth in stores and online, the benefit of a weak comparator period last year and "favourable" weather this year.
Store like-for-like revenue in the fourth quarter was up by 12% to GBP205.5 million, while like-for-like online revenue on Dunelm.com also continued to grow strongly in the quarter, up 37% to GBP39.0 million on the prior year.
For the 52 weeks to June 29, Dunelm's like-for-like revenue increased by 11% to GBP1.02 billion, with like-for-like store revenue rising by 7.7% and like-for-like online revenue up by 35%.
Total Dunelm revenue in the fourth quarter was GBP264.1 million, up 12% on the prior year. For the full year, the company delivered total revenue growth of 4.8% to GBP1.10 billion.
"The strong growth in the final quarter, and the year as a whole, demonstrates that in a rapidly changing marketplace, the broad appeal of Dunelm's purpose 'to help everyone create a home they love' is resonating well," said Chief Executive Nick Wilkinson.
In the fourth quarter, gross margin increased by 240 basis points. Core Dunelm margin improved by 200 basis points in the final quarter, driven by better sourcing and a lower level of end of season clearance compared to the same period last year, it said.
For the full year, the FTSE 250-listed company said it expects to report improvements in its total margin by 160 basis points, with core Dunelm margin improving by around 100 basis points.
Dunelm didn't provide its actual margins, just the movements.
As a result, Dulnelm said it expects its pretax profit to be towards the upper end of the range of GBP124 million to GBP126 million. In financial 2018, the company reported underlying pretax profit of GBP102 million.
"Looking forward, as the UK's leading homewares specialist, we see significant opportunity for continued growth both from our stores and online, whilst maintaining our improved operational discipline," said Wilkinson.
He added: "In the short-term, we remain cautious about the uncertain political climate and the impact it may have on consumer spending, but expect to make further progress in the year ahead and are confident about the group's longer-term prospects."
Separately, Dunelm said it appointed Ian Bull as a non-executive director, with immediate effect. He will become a member of the Audit & Risk, Remuneration & Nominations committees.
Bull is currently the senior independent director and chair of the Audit Committee of property investor St Modwen Properties PLC, and non-executive director and chair of the Audit Committee at pizza chain Domino's Pizza Group PLC.
Dunelm said Bull has previously served as finance director of pubs operator Greene King PLC, chief financial officer at gambling firm Ladbrokes PLC, and CFO of holiday parks owner Parkdean Resorts Group.
"I am delighted to welcome Ian to the board. Given his broad business and financial leadership background and board and committee experience, he will be a valuable addition to Dunelm," said Chair Andy Harrison.
