Last checked at 6 Nov 2008 07:00
6th November 2008
AGM AND INTERIM MANAGEMENT STATEMENT
18 weeks to 1st November 2008
Dunelm Group plc, the leading out-of-town specialist homewares retailer, issues its Interim Management Statement in advance of its Annual General Meeting to be held today at 10.30am.
Sales
For the 18 weeks to 1st November 2008, total sales grew by 4.3% and like for like ("LFL") sales declined by 3.9%. We estimate that we continue to gain share in a market which has contracted in the last 12 months.
This LFL sales performance represents an improvement since our last trading update, when we reported an LFL sales decline of 5.7% after 10 weeks. This reflects the strength of our "simply value for money" proposition as well as a softening of comparatives which continues through the rest of this financial year.
We have continued to see a small reduction in average transaction values compared with last year but the year on year decline in footfall has been less marked in September and October.
Gross Margin
We have retained our consistent approach to pricing and have not invested in unplanned discounts or promotions. We have experienced a year-on-year strengthening of gross margin so far in this financial year of 100bps, principally driven by a continuing change in mix in favour of special buy merchandise.
New Stores
Since the start of the financial year we have opened a new superstore in Huddersfield and today we are opening a new superstore in Newtownabbey, Northern Ireland.
We are fitting out a further superstore in Plymouth which will open in early December. This will take us to a total of 79 superstores at the end of the half-year.
We remain committed to expanding the business to at least 150 superstores in the UK and we continue to seek new store opportunities, in a property market which features increasingly limited occupier demand. We currently have a further two stores under contract which will open in the second half of the current financial year and four more which will open after the year-end.
Financial position
As at 1st November net debt was £6.2 million. Committed bank facilities amounted to £50 million.
Purchase of own shares
At the AGM today we are seeking renewed authority to buy back shares in the Company. We have used this authority over the past year to purchase shares to hold in treasury to satisfy employee share options on exercise. We do not currently expect to purchase shares for cancellation nor do we expect to purchase a material number of shares overall.
Commenting on Dunelm's performance, Will Adderley, Chief Executive, said:
"Like most retailers, we have seen conditions become even more challenging in recent months, with customers increasingly careful about their spending. Dunelm is all about giving 'simply value for money' so we are well positioned to help our customers during these difficult times.
"I am very pleased with our performance given the trading environment, and I think we have great opportunities for further expansion. In particular, I am very confident that the medium term pipeline of new store openings will remain strong."
The next update to shareholders will be issued on 6th January 2009 in respect of the 26 weeks to 27th December 2008.
For further information please contact:
| Dunelm Group plc | 0116 2644 356 |
| Will Adderley, Chief Executive | |
| David Stead, Finance Director | |
| Hogarth Partnership | 020 7357 9477 |
| John Olsen / Fiona Noblet |
Notes to Editors
Dunelm is amongst the top 10 retailers operating in the £12bn UK homewares market. The Group currently operates 91 stores, branded Dunelm Mill, of which 78 are out-of-town superstores and 13 are high street shops. The majority of the stores are located in the Midlands or north-west of England. Dunelm employs over 5,000 full and part time staff, the vast majority of whom work in the stores.
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 in the Midlands specialising in soft furnishings. The first Dunelm superstore was opened in 1991, leading to the Group's expansion into the broader homewares market.
The superstores provide an average of 28,000 sq ft of selling space and offer an extensive range of around 20,000 products across a broad spectrum of categories, including bedding, curtains, gifts and seasonal items, cushions, bathroom products, kitchenware, quilts, pillows and rugs. Dunelm also specialises in offering a wide range of fabrics, made to measure curtains and a frequently changing series of special buys. The directors are passionate about ensuring that all ranges live up to Dunelm's philosophy of offering customers "Simply Value for Money".
Last year Dunelm also introduced an on-line store, to be found at www.dunelm-mill.com. Currently over 11,000 products are available through the website.
Dunelm listed on the London Stock Exchange in October 2006 (DNLM.L) and has a current market capitalisation of over £280 million.
Copies of this statement, the annual report and accounts and other press releases are available on the investor section of the company's website www.dunelm-mill.co.uk