11th Feb 2015 07:58
LONDON (Alliance News) - Homewares retailer Dunelm Group PLC Wednesday delivered a higher first-half profit, driven by a 14% increase in revenue helped by new store openings and strong growth online.
However, the group cautioned that it expects benefits of top-line growth in the remainder of the financial year to be largely offset by higher operating costs, saying it expects to return to stronger profit growth next year.
The group reported a pretax profit of GBP68.2 million for the six months to December 27, up almost 11% from last year's GBP61.6 million first-half profit. It maintained its gross margin at 50.4%.
Profit gains were buoyed by a 14% increase in revenue to GBP406.4 million, up from GBP356.4 million the year before. Like-for-like sales during the year grew by 6.2%. The group also said it saw "significant" growth in its online business, with home delivery sales up 76% during the period.
Dunelm declared a 10% increase in its interim dividend to 5.5 pence per share, and also proposed a special distribution of 70.0 pence per share.
"We have set ourselves a new, medium-term goal of growing sales by 50%, with half of this coming from stores - improving sales densities in existing stores and rolling out new ones - and the balance coming from growth in the home delivery channel, including increased penetration in furniture," said Chief Executive Will Adderley in a statement.
Dunelm continued with its store opening plans, opening a further six superstores in the first half, with plans to six more in the second half of the year. The group said its goal still remains to expend from the 142 superstores it currently operates from, to around 200 stores, with a good focus on the south of England.
"We have to keep investing in growth-driving activities, in capacity and in our senior team. In the remainder of this financial year we expect the benefits of top-line growth to be largely absorbed by these increases in operating costs, with a return to stronger profit growth next year reflecting the positive impact of the change in culture and strategic emphasis," Adderley added.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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