Last checked at 4 Jul 2013 07:00
4th July 2013
Dunelm Group
Year-end Trading Update
Dunelm Group plc ("Dunelm" or "the Group"), the UK's leading homewares retailer, provides the following update on trading for the final quarter of its financial year to 29th June 2013, and for the 52 weeks ended on that date.
Revenue
Period to 29th June 2013
| 52 weeks | 26 weeks | 13 weeks |
Total sales value | £677.2m | £337.1m | £159.3m |
Total sales growth | +12.2% | +11.0% | +6.4% |
LFL sales growth | +1.7% | +0.9% | -2.8% |
Over the full financial year, total revenue grew by 12.2% and like for like revenue by 1.7%. The significant increase in total sales reflects the strong store opening programme over the last two financial years, including 14 new openings in the latest financial year (of which two were relocations and one a re-opening).
Revenue growth for the fourth quarter was dampened by the annualisation of extremely favourable weather conditions in the equivalent period of the previous financial year, during which like-for-like revenues grew by 10.4%. Against these challenging comparatives, total revenue grew by 6.4%, with a 2.8% decline in like-for-like revenues.
Gross Margin Percentage
Expansion of gross margin continued in the period, reflecting further improvement in product lifecycle management, as well as benefits from direct sourcing initiatives. Gross margins for the financial year and for the quarter are estimated to have improved by approximately 40 and 80 basis points respectively compared with the prior year, with the fourth quarter performance benefitting from a cleaner stock position as older clearance stock had been exited successfully in our winter sale.
Strategy Progress
We continue to invest in our customer proposition, for example through enhanced in-store customer service and the extension of our Dunelm at Home (home consultation) service. Similarly, through investment in targeted recruitment, improved systems and expanded physical infrastructure within multi-channel we are increasing our capability across the business to enable future growth.
Having opened one new store in the quarter our superstore portfolio now comprises 126 stores, compared with our medium term target of 200 UK superstores. With four new leases signed since our last update, the pipeline of legally committed new store opportunities now stands at eight2. Unlike the two previous financial years the profile of openings in the new financial year will be weighted towards the second half.
We have seen further progress in our multi-channel business with continuing revenue growth during the period. Over the financial year as a whole, multi-channel revenues amounted to approximately 4% of total sales, increasing to 4.5% in the final quarter. Natural growth in this area will be supplemented by a significant increase in the number of lines offered for home delivery, enabled by a larger fulfilment centre. We now anticipate that this facility will become operational in October this year, prior to the peak trading period.
Financial Position
The Group remains strongly cash generative. Daily average net cleared funds over the period since our return of capital in November 2012 were £51.5m, and £55.0m in the final quarter.
Commenting on Dunelm's performance, Nick Wharton, Chief Executive, said:
"Over the last twelve months, we have significantly strengthened our customer proposition, have further improved our margin management and have grown our store portfolio through the addition of 14 new superstores. We completed the financial year with a solid trading performance in the final quarter and as a consequence, the Board anticipates that profit before tax for the year will be approximately £108m.
With plans in place to develop further our compelling customer proposition, and with a significant opportunity for future growth from both new stores and multi-channel still in front of us, the Board remains confident in the overall prospects for the business."
For further information please contact:
Dunelm Group plc | 0116 2644 356 |
Nick Wharton, Chief Executive | |
David Stead, Finance Director | |
MHP Communications | 020 3128 8789 |
John Olsen / Simon Hockridge |
Announcement of Preliminary Results
Dunelm will make its preliminary results announcement on 12th September 2013. There will be a presentation for analysts at 10.00am in the offices of UBS, 1 Finsbury Avenue, London EC2M 2PP. Those analysts who wish to attend are requested to contact Naomi Lane of MHP on 020 3128 8204 or Naomi.lane@mhpc.com . A copy of the presentation will be made available on the Dunelm website.
Notes
1. Like for like sales represent revenues from stores trading for at least one full financial year prior to 1st July 2012 and exclude stores with significant change of space in the current or previous financial year.
2. The committed pipeline of eight stores includes the relocation of one existing under-sized superstore; none are scheduled to open in the first quarter of the financial year to 28th June 2014.
3. Quarterly sales and margin analysis:
Year to 29th June 2013 | |||||||
Q1 | Q2 | H1 | Q3 | Q4 | H2 | FY | |
Total sales | £151.8m | £188.3m | £340.1m | £177.8m | £159.3m | £337.1m | £677.2m |
Total sales growth | +13.8% | +13.1% | +13.4% | +15.4% | +6.4% | +11.0% | +12.2% |
LFL sales growth | +3.0% | +1.6% | +2.2% | +5.2% | -2.8% | +1.2% | +1.7% |
Gross margin growth | +40bps | +20bps | +30bps | +20bps | +80bps* | +50bps* | +40bps* |
*estimated
Year to 30th June 2012 | |||||||
Q1 | Q2 | H1 | Q3 | Q4 | H2 | FY | |
Total sales | £133.4m | £166.5m | £299.9m | £154.1m | £149.7m | £303.8m | £603.7m |
Total sales growth | +5.3% | +11.7% | +8.8% | +10.7% | +21.2% | +15.6% | +12.1% |
LFL sales growth/(decline) | -2.0% | +3.8% | +1.1% | +0.6% | +10.4% | +5.7% | +3.1% |
Gross margin growth | +50bps | -20bps | +10bps | +30bps | +80bps | +50bps | +30bps |
Notes to Editors
Dunelm is market leader in the £11bn UK homewares market. The Group currently operates 135 stores, branded Dunelm Mill, of which 126 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 has been listed on the London Stock Exchange since October 2006 (DNLM.L) and has a current market capitalisation of approximately £1.8bn.