// Dunelm pre-tax profit balloons 34.4% to £112.4m for the half-year period ending Boxing Day
// Interim revenue came in at £719.4m, up 23%, boosted by 111% online sales surge and despite store closures
// Dunelm says it will start paying dividends again, with an interim pay out of 12p due to shareholders
Dunelm has hailed a surge in interim profits and sales, prompting it to resume dividend payments and express optimism about its future.
The furniture retailer said pre-tax profit reached £112.4 million in the half-year period ending Boxing Day – representing a 34.4 per cent year-on-year increase.
This was achieved on the back of revenue of £719.4 million, up 23 per cent year-on-year, despite losing some market share and stores being forced to close because of the Covid-19 pandemic in the second part of the period.
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Nonetheless, the figures were pushed up by online sales – which soared 111 per cent – and overall, Dunelm said it “significantly outperformed the market”.
The retailer also confirmed it would start paying dividends again, with an interim pay out of 12p due to shareholders.
The retailer also finished the half-year period with a net cash position of £141 million – a stark contract to the net debts of £68m for the same period the year before.
Free cash flows had also increased year-on-year to £98 million.
Dunelm chief executive Nick Williamson hailed the interim results and said he had “never been more confident about the future” of the retailer.
“Sales were particularly strong in the first quarter, before we had to navigate the various restrictions which impacted the remainder of the period,” he said.
“These restrictions have become more severe in the second half of our financial year, with all but one of our stores currently closed, although we continue to serve customers through our digital channels, which have significantly advanced during the last year.
“Beyond the near-term uncertainty, we have never been more confident about the future.
“Dunelm is a market leader with a challenger brand mentality in a large and growing segment.
“We have a clear runway to grow active customers and their frequency across our total retail system and to realise our long-term ambitions.”
Wilkinson added that he agrees with rules that allowed his supermarket rivals to keep selling homewares while Dunelm was forced to close.
He said that from a customer standpoint, it made very little sense to cordon off the aisle selling products for the home in essential shops, including supermarkets.
“We’d like to be open soon, we think our stores are safe. But we think it’s absolutely fine that stores that are open are permitted to sell homewares. Because otherwise it’s just a bit odd, isn’t it?” Wilkinson said.
“Some local districts tried to prevent that happening, but customers just said: ‘Look, I’m here, why can’t I buy a saucepan?’ And I think from a customer point of view, I’m sort of with them.”
After further lockdown restrictions which started in January, all but one of Dunelm’s shops – one in Jersey which opened last week as restrictions changed – are closed, Wilkinson added.
At the moment, Dunelm staff are on what the company calls a “furlough equivalent” scheme, which covers 80 per cent of an employee’s salary when they cannot work.
However, the business has been able to find meaningful work for most of its approximately 10,000 staff.
Dunelm’s curtain factory in Leicester also produced 65,000 medical gowns to help fill a gap in personal protective equipment during the pandemic.
Shares in the retailer rose 6.9 per cent this morning.
with PA Wires
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