// Dunelm continues to defy the gloom in UK retail by posting a major jump in profits
// In the 6 months to December 28 sales jumped 6% to £585m, with pretax profits up 19.4% to £84.9m
// Dunelm says profits for the year likely to be ahead of even the most positive predictions from analysts
Dunelm has revealed it was one of the big winners in UK retail as it continued to defy the gloom through tightening costs and boosting profits.
As a result of the 19.4 per cent boost in pre-tax profits for the six months to December 28 to £84.9 million, bosses added they expect full year profits to beat analysts’ expectations.
Half-year revenues also rose six per cent to £585 million during the period.
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The homewares and furniture retailer said the boost came thanks to not taking part in Black Friday or any other pre-Christmas promotions, along with cutting back costs.
A new website rolled out in October also helped, along with tablets in stores to allow customers to order providing a customer experience boost.
“The third quarter has started well, with a successful Winter Sale across the total retail system,” Dunelm chief executive Nick Wilkinson said.
“As a result, we expect full year FY20 profit before tax to be slightly ahead of the top of the latest range of analyst expectations.”
There have been fears that the coronavirus outbreak could slow down production in China, where factories are closing or cutting back production.
However, Wilkinson said: “We are monitoring the coronavirus outbreak carefully. To date we have not assumed any material disruption to our supply chain or any financial impact in the year.”
In the year ahead, the boss said he plans to open two or three new superstores and will shortly trial a small 5000sq ft site on a high street.
“This store opening is a low-cost test to understand how our customers react to a smaller, edited range in a location chosen to increase our reach,” Wilkinson said.
He added that nline-only products will also grow, with 6000 lines added this year.
The homewares market has suffered in recent months, dropping 1.4 per cent in the first half of the financial year.
However, Dunelm said it grew 2.3 per cent during the period – an indication it is winning customers from rivals.
with PA Wires