Dunelm Regulatory News (DNLM)

10 Jul 2007 07:00

Dunelm Group plc10 July 2007 10 July 2007 DUNELM GROUP PLC TRADING UPDATE Following the end of its financial year on 30 June 2007, Dunelm Group plc("Dunelm" or the "Company"), the specialist homewares retailer, today makes thefollowing comments on trading. Trading performance The Board is pleased to confirm strong sales growth for the 52 weeks to 30 June2007: Total sales: £354.7m (2006: £315.2m)Total sales growth: + 12.5%Like for like sales growth: + 6.1% These figures reflect LFL growth of +4.7% in Q3 and +10.1% in Q4 of theCompany's financial year. Like for like sales growth during the latter weeks of the financial year wasparticularly strong, reflecting soft comparatives due to hot weather and theWorld Cup in 2006. Buying margin has remained solid over the second half and operating costs havebeen well controlled. As a result, the Board now anticipates that underlyingoperating profit will be at the upper end of its previous expectations. Store portfolio The Company's store expansion programme continues. During the year, newsuperstores were opened in Stevenage, Colchester, Perth and Bradford and thesuperstore in Swansea was relocated to a larger unit. At the period end, theCompany's out of town superstore portfolio comprised 68 units. As of today, contracts have been exchanged for a further 5 superstore unitswhich are expected to commence trading in the 2007/8 financial year. Theseinclude the acquisition of a freehold unit in Leeds. A number of otheropportunities are being actively pursued and overall the new store pipeline issignificantly stronger than at the equivalent time last year. Whilst expanding the superstore chain, the Company has also taken theopportunity to exit three smaller high street locations since Christmas. In eachcase the lease had expired and a superstore had already been opened serving thesame catchment area. Infrastructure The Company has completed the transition to a new central warehouse facility inStoke. Non-recurring costs arising from this transition totalled approximately£1.3m, of which £1.0m was already accounted for in the first half. The disposalof the former warehouse at Burton-on-Trent was also completed as expected inJune, yielding a profit against book value of £1.1m. Will Adderley, Chief Executive of Dunelm, commented: "I am very pleased with our progress since IPO. We are very serious aboutdelivering what we promise, whether it's to our customers or our shareholders,and I think we have done that over the last year. "Looking ahead, we still have significant opportunity to grow through openingmore stores and we are as excited as ever about that. However, we also have tobe realistic about the state of consumer demand in light of recent interest raterises. We expect that growth in existing stores will be harder to come by overthe next few months." A store and warehouse visit for analysts will take place on 11 July 2007. Nomaterial new information will be disclosed. Dunelm will make its preliminary results announcement on 19 September 2007.There will be a presentation for analysts at 9.30am in the offices of UBS, 1Finsbury Avenue, London EC2M 2PP. Those analysts who wish to attend arerequested to contact Natasha Jobling of Hogarth Partnership at the number below.A copy of the presentation will be made available on the Company's website. - Ends - For further information please contact: Dunelm Group plc 0116 2644 356Will Adderley, Chief ExecutiveDavid Stead, Finance Director Hogarth Partnership 020 7357 9477John Olsen / Fiona Noblet Notes to editors Dunelm is one of the top 10 retailers operating in the circa £12bn UK homewaresmarket. As at 30 June 2007 the Group had 82 stores in total, all branded DunelmMill, of which 68 were out-of-town superstores. The majority of the stores arelocated in the Midlands or north-west of England. Dunelm employs over 5,000 fulland part time staff, the vast majority of whom work in the stores. Dunelm was founded in 1979 as a market stall business, selling ready-madecurtains. The first shop was opened in Leicester in 1984 and over the followingyears the business developed into a successful chain of high street shops in theMidlands specialising in soft furnishings. The first Dunelm superstore wasopened in 1991, leading to the Company's move into the broader homewares market. The superstores provide an average of 28,000 sq ft of selling space and offer anextensive range, typically over 18,000 products across a broad spectrum ofcategories including bedding, curtains, gifts and seasonal items, cushions,bathroom products, kitchenware, quilts, pillows and rugs. Dunelm alsospecialises in offering a wide range of fabrics, made to measure curtains and afrequently changing series of special buys. The directors are passionate aboutensuring that all ranges live up to Dunelm's philosophy of offering customers"Simply Value for Money". Dunelm listed on the London Stock Exchange in October 2006 (DNLM.L). This information is provided by RNS The company news service from the London Stock Exchange