Last checked at 14 Apr 2011 07:00
14th April 2011
Dunelm Group plc ("Dunelm")
Interim Management Statement
Dunelm, the leading out-of-town specialist homewares retailer, today provides the following update on trading for the third quarter of its current financial year, comprising the 13 week period ended 2nd April 2011.
Sales
13 weeks to 2nd April 2011 | 13 weeks to 3rd April 2010 | 39 weeks to 2nd April 2011 | 39 weeks to 3rd April 2010 | |
Total sales value | £139.0m | £127.1m | £414.7m | £381.3m |
Total sales growth | +9.4% | +12.8% | +8.7% | +21.2% |
LFL sales growth | -1.3% | +3.2%* | -1.3% | +11.1% |
Contribution from new space | +10.7% | +9.6% | +10.0% | +10.1% |
* Underlying LFL growth, after adjusting for timing of the winter sale, was +7.2% in the 13 weeks to 3rd April 2010
Trading conditions remained challenging through the third quarter, with favourable year on year weather patterns in January largely offset by the timing of Easter. However, Dunelm's category leading homewares offering saw the Group gain market share on a LFL basis, with a performance over 200bps ahead of the BRC home textiles index.
Gross Margin
Gross margin increased by approximately 150bps compared with the third quarter of the previous year. This reflects pass-through of cost price increases experienced so far this year, together with strong margin management through the January sale which we exited with low volumes of discontinued stock. Whilst, to date, our buying scale and supply chain structure have provided some protection, cost price pressures are likely to continue over the coming months. In the current inflationary environment, the strong rate of increase in gross margin which the Group has achieved over recent years is unlikely to be maintained.
Store Portfolio
Two new superstores were opened during the quarter, in Scarborough and Truro, each of which opened strongly. The store development pipeline remains encouraging with ten further stores contractually committed. Of these, one will open in the final quarter of the current financial year and the balance in next financial year. This pipeline includes the relocation of two existing superstores to more attractive sites.
Three major and three smaller refits have been completed in the quarter, with a further two major refits scheduled for completion prior to the year-end.
Financial Position
As at 2nd April 2011 Dunelm had net cleared funds of £27.0m, after payment of the interim dividend. Daily average net cleared funds over the year to date were £34.5m.
Nick Wharton, Chief Executive, commented:
"Against strong prior year comparatives and difficult trading conditions, it is pleasing to see the continued growth of our business through new stores and a further strengthening of our market position through share gains. We have maintained our disciplined approach to the management of gross margin and operating costs.
"Looking forward, although we expect the consumer environment to remain very challenging, we are confident of delivering further growth thanks to the strength of our proposition, the launch of new and refitted stores and our multi-channel developments."
Notes
1. Except for the trading activities described, there has been no significant change to the financial condition of the Group.
2. Like-for-like sales represent revenues from stores trading for at least one full financial year prior to 4th July 2010.
Forthcoming Newsflow
Dunelm's next scheduled trading update will be on 7th July 2011 followed by the full year preliminary results announcement on 15th September 2011.
For further information please contact:
Dunelm Group plc | 0116 2644 356 |
Nick Wharton, Chief Executive | |
David Stead, Finance Director | |
MHP Communications | 0203 128 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 111 stores, branded Dunelm Mill, of which 102 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.