Dunelm shrugs off gloom with 15% profit rise

Dunelm has shrugged off anaemic trade in the retail sector to notch up a strong rise in its revenues over the past six months.

A bullish programme of expansion in which the homeware chain opened ten new superstores has helped revenues rise 13.4 per cent to £340.1 million in the 26 weeks to December 29, with like-for-like sales up 2.2 per cent.

Pre-tax profit jumped almost 15 per cent to £59.8 million.

The FTSE 250-listed group, which began life as a market stall selling curtains in Leicester, is now worth some £1.6 billion and runs 133 stores across Britain, mostly located in out-of-town shopping centres.

It is planning to increase this number to 200, including a further four new outlets over the second half of the financial year. Dunelm estimates that it takes just 30 months for a new store to pay for itself.

Nick Wharton, the group’s chief executive, said the appeal of Dunelm’s products remained broad and had been spread by the internet. “We have made good strategic progress during the period, particularly supported by our work to improve customer service, the continued expansion of our store portfolio across the UK and the progress made in our online offering,” he said.

“The final quarter of our financial year results presents some challenging like-for-like sales comparatives, but with a significant new store growth opportunity and an exciting multi-channel agenda in place, the board remains confident in the overall growth prospects for the business.”

However, Dunelm did point out that the first half of 2013 would bring risks, including sharper competition and an unpredictable economic climate. It also warned the low input costs that had helped to widen its profit margins might not last.


Source: The Times 12.02.13