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Dunelm profits up 7.8% in first half

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Out-of-town based homewares retailer Dunelm saw its total revenues rise 8.8 per cent in the first half of its financial year, according to results released today.

In the 26 weeks ending December 31st 2011, its profit before tax totalled £52.2 million representing a rise of 7.8 per cent year-on-year, while the group’s gross margin improved 10 basis points to 49.2 per cent, and earnings per share increased 8.8 per cent to 18.6p.

Like-for-like trading grew 1.1 per cent during the half, although with declines in sales seen during the same period last year these results were up against soft comparisons.

Nick Wharton, CEO of Dunelm, said: “Dunelm has achieved robust trading results in a very demanding retail environment, and has continued to gain market share on a like for like basis.

“We have also made significant progress on our longer term development plan, not only delivering a very ambitious store opening programme over the last quarter, but also making significant improvements to our on-line offer which have been well received by customers.”

With many retailers within the homewares sector struggling at present due to a cautious consumer atmosphere which is seeing many shoppers avoid major purchases, the growth delivered by Dunelm represent a strong performance from the business.

Store expansion and improving online services remain the main focus for the retailer, with the Dunelm launching its Reseserve & Collect offer and opening 11 new superstores during half, while 50 per cent of its outlets are now either new or have been refitted in the last three years.

During the next six months four new superstores are expected to be opened by the group while another four locations have already been targeted for new outlets in the following year, and Neil Saunders, Managing Director of retail analyst firm Conlumino, believes this expansion is fundamental to Dunelm’s future success.

“New space remains a key driver of growth for the company and we believe significant potential remains to roll out additional stores,” Saunders said.

“Moreover, recent investments in the online proposition should yield dividends over the coming year. The challenge now will be to integrate stores and online more closely in order to develop a seamless multichannel proposition; Dunelm has already made progress on this front with its Reserve & Collect scheme.

“We believe 2012 will be a very tough year for the homewares market. However, Dunelm’s positioning is very much aligned with consumer desires for good value for money and we believe it will continue to grow its customer base as more shoppers trade down.”

The retailer also announced today that Pets at Home CEO Matt Davies will be joining its board as a non-executive director with immediate effect.

Published on Wednesday 08 February by Editorial Assistant

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