Dunelm Regulatory News (DNLM)

8 Jan 2008 07:00

Dunelm Group plc08 January 2008 8th January 2008 DUNELM GROUP PLC TRADING UPDATE Following the end of the 26 week trading period to 29th December 2007, thespecialist out-of-town homewares retailer Dunelm Group plc ("Dunelm" or "theCompany") today makes the following comments on trading. Financial performance The Company has continued to achieve an increase in both total and like for like("LFL") sales through to the end of the half year, as follows: Total sales £197.4m (26 weeks to 30th December 2006: £178.4m)Total sales growth +10.6%LFL sales growth +4.9% Stores included in the LFL population comprise 63 superstores, 13 high streetstores and the Dunelm webstore. Product gross margin over the 26 weeks is expected to have been approximately80 basis points higher than during the equivalent period last year. Thisreflects a stable pricing environment and continuing sourcing gains primarilydue to volume increases. Operating costs have remained tightly controlled during the period. Store portfolio During the period, new superstores opened successfully in Aberdeen, Shoreham,Peterborough (where the existing high street store has been closed), Eastbourneand Dumfries. The geographic diversity of these openings demonstrates thenationwide appeal of the Dunelm proposition, and underlines the scale of theroll-out opportunity which still exists. As at 29th December 2007 the Company'sportfolio included 73 superstores, with the Board still committed to a mediumterm target of at least 150 superstores. Further openings will take place in Leeds and Bournemouth during January, withSittingbourne and Huddersfield expected to follow before the financial year-end.This would bring the total number of openings in the financial year to nine. All of the sites referred to above are leasehold properties with the exceptionof Leeds which was acquired as a freehold in the early part of the currentfinancial year. The Board believes that the retail warehouse market will, over the next 12 to 18months, become increasingly favourable to occupiers with strong covenants. As aconsequence the pipeline of potential openings for the next financial year islooking strong and includes one leasehold unit on which contracts have alreadybeen exchanged (Ebbw Vale). Will Adderley, Chief Executive of Dunelm, commented: "We are delighted to have maintained such a strong like for like salesperformance during a period when we estimate the homewares market has shownlittle or no growth. As usual, we have done this without compromising ourcustomer proposition based on everyday fair prices and 'Simply Value for Money'. With all that has been said and written about a slowdown in the consumereconomy, we naturally approach the next few months with caution. Having saidthat, we feel our exposure is limited by our relatively low transaction values -our shoppers on average spend under £30 on each visit. In addition, the businessis in better shape than ever and whatever the economy may throw at us, I amconfident we will find opportunities which we can exploit." Dunelm will release its interim results on 27th February 2008. There will be apresentation for analysts at 9.30am in the offices of UBS, 1 Finsbury Avenue,London EC2M 2PP. Those analysts who wish to attend are requested to contactNatasha Jobling of Hogarth Partnership on the number below. A copy of thepresentation will be made available on the Company's website. - ends - Dunelm Group plc 0116 2644 356Will Adderley, Chief ExecutiveDavid Stead, Finance Director Hogarth Partnership 020 7357 9477John Olsen / Fiona Noblet This information is provided by RNS The company news service from the London Stock Exchange