Last checked at 7 Jul 2011 07:00
7th July 2011
Dunelm Group plc ("Dunelm")
Interim Management Statement
Following the end of its financial year on 2nd July 2011, Dunelm, the leading out-of-town specialist homewares retailer, announces the following trading update for the 13 weeks to 2nd July 2011 and the 2011 financial year.
Revenues
Fourth quarter (13 weeks to 2nd July 2011) | Second half (26 weeks to 2nd July 2011) | Full year (52 weeks to 2nd July 2011) | |||
Total sales value | £123.8m | £262.8m | £538.5m | ||
Total sales growth | +11.0% | +10.1% | +9.3% | ||
LFL sales growth1 | +1.9% | +0.1% | -0.6% | ||
Contribution from new space | +9.1% | +10.0% | +9.9% | ||
Prior year LFL sales growth | -1.9% | +0.8% | +8.0% |
Despite the challenging consumer environment, the strength and breadth of Dunelm's customer offer, particularly in its range of price points, has seen the Group's LFL revenue move ahead of the BRC home textiles index over each of the last two quarters, implying a further gain in market share.
Gross Margin
Over the full financial year, we expect gross margin to have increased by approximately 120 basis points. This improvement reflects full mitigation of the impact of cost pressures, including commodity inflation and indirect taxation, while maintaining our "simply value for money" price positioning.
Store Portfolio
The opening of a new superstore, at Fareham, in the quarter brings total openings in the financial year to 10, including one relocation. The portfolio now comprises 103 superstores, compared to our estimated potential for the UK of up to 200. Our pipeline remains strong, with 13 new superstores contractually committed, including two relocations of existing superstores to significantly more attractive locations.
Our refit programme, which includes introducing our latest customer offer to existing stores, continues, with 8 major and 14 medium refits completed in the year. A blend of major and medium refits will continue, with at least 15 planned over the coming financial year.
Financial Position
The Group remains highly cash generative and had net cleared funds of £31.6m on 2 July 2011 (2010: £10.6m), with daily average net cleared funds over the year of £35.9m (20102: £18.4m). We have continued to invest in the future growth of the business through new and refitted stores and core infrastructure, with capital investment approaching £40m in the year. The development of our new head office facility is on schedule and we expect to occupy the new building from September 2011.
Nick Wharton, Chief Executive, commented:
"In what has been a particularly challenging year, we are encouraged both by the trading performance and by the strategic development of the business. Our focus on constantly improving our customer offer has allowed us to gain market share while expanding gross margins; at the same time our future growth prospects have been enhanced through strengthening the pipeline of new stores and the continuing development of our multi-channel footprint. The combination of satisfactory trading and a disciplined approach to operating costs means that the Board anticipates that profit for the year will be in line with current market expectations."
Notes.
1. Like-for-like sales represent revenues from stores trading for at least one full financial year prior to 4th July 2010.
2. Daily average net cleared funds for FY10 are for the period from 31st March 2010, i.e. after the special return of capital which took place then.
Announcement of Preliminary Results
Dunelm will make its preliminary results announcement on 15th September 2011. There will be a presentation for analysts at 9.15am in the offices of UBS, 1 Finsbury Avenue, London EC2M 2PP. Those analysts who wish to attend are requested to contact Natasha Jobling of MHP on 020 3128 8100 or natasha.jobling@mhpc.com. A copy of the presentation will be made available on the Dunelm website.
ENDS
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 |
For photography, please contact MHP Communications.
Notes to Editors
Dunelm is the UK's leading specialist out of town homewares retailer, operating in the £12bn homewares market. The Group currently operates 112 stores, branded Dunelm Mill, of which 103 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 employs over 6,000 full and part time staff, the vast majority of whom work in the stores and was listed on the London Stock Exchange in October 2006 (DNLM.L). The Group has a current market capitalisation of approximately £800m.
Appendix
Quarterly information
FY11
13 weeks to 3rd October 2010 | 13 weeks to 1st January 2011 | 13 weeks to 2nd April 2011 | 13 weeks to 2nd July 2011 | |
Total sales value | £126.7m | £149.0m | £139.0m | £123.8m |
Total sales growth | + 11.6% | +5.9% | +9.4% | +11.0% |
LFL sales growth | +2.1% | -4.2% | -1.3% | +1.9% |
Contribution from new space | +9.5% | +10.1% | +10.7% | +9.1% |
Gross margin change yoy | +100bps | +120bps | +150bps | +110bps |
FY10
13 weeks to 3rd October 2009 | 13 weeks to 2nd January 2010 | 13 weeks to 3rd April 2010 | 13 weeks to 3rd July 2010 | |
Total sales value | £113.6m | £140.6m | £127.1m | £111.6m |
Total sales growth | + 25.5% | +26.4% | +12.8% | +8.8% |
LFL sales growth | +15.4% | +15.4% | +3.2% | -1.9% |
Contribution from new space | +10.1% | +11.0% | +9.6% | +10.7% |
Gross margin change yoy | +210bps | +190bps | +170bps | +160bps |
Note: FY10 quarterly analysis reflects a significant calendar effect vs FY2009 relating to timing of winter sale. Adjusting for this, LFL sales growth would have been +11.6% in Q2 and +7.2% in Q3, with gross margin movement +250bps and +100bps respectively