11th Feb 2014 08:27
LONDON (Alliance News) - Dunelm Group PLC said Tuesday that pretax profit grew 2.9% to GBP61.6 million during the first-half of the year, but recorded a slight decline in like-for-like sales for the period.
The homewares retailer said in its interim results for the 26 weeks to December 28 2013 that gross margin improved during the period, up 90 basis points to 50.4%.
Dunelm, which runs its retail stores as Dunelm Mill, reported a 4.8% rise in revenues for the six month period to GBP356.3 million, up from GBP340.1 million for the comparable period the previous year. The company said revenue growth during the half-year has been supported by the opening of six new stores and the relocation of a previously under-spaced superstore.
Dunelm said its progress during the reporting period reflects the success of its growth strategy, within which it aims to continue space expansion, grow its multi-channel trading tools, increase gross margin, pretax profit and earnings per share, and reach strong cash flow levels.
Like-for-like sales for the six months were down 0.9%, compared with the 2.2% growth reported a year earlier, which Dunelm said, "reflected the marked reduction in footfall during the unusually warm summer weather, consistent with Dunelm's status as a destination visit for discretionary homewares shopping." However, the firm reports 2.9% growth in like-for-like sales for the second quarter.
The firms' sales have been supported somewhat by the continued growth in its multi-channel sales business, the division has continued to grow and accounts for around 6% of revenues during the second quarter, boosted by an enhanced online offer, said Dunelm.
Dunelm said the board remains confident in its business model and strategy, as well as its capacity for future growth. To support this, the company confirmed that it has increased its interim dividend by a further 11.1% to 5 pence, up from 4.5 pence for the comparable period last year.
This follows the payment of a special dividend in October which saw the firm pay a special dividend of 25.0 pence per share, paying out a total of GBP50.7 million. The firm has now returned over GBP150 million to shareholders over and above ordinary dividends since March 2010.
During the quarter the group committed to the opening of ten further sites, five of which, including two relocations, are expected to open during the current year. The group currently operates 140 stores, of which 131 are out-of-town superstores and nine are located on high streets, as well as its online portal.
Nick Wharton, Chief Executive of the group said, "Dunelm has delivered strong trading results over the period, and has made further important strategic progress. We have further strengthened our customer offer, particularly through service, and improved our infrastructure, whilst increasing scale through expanding the store portfolio and growing multi-channel. We have also invested significantly in increasing brand awareness, including through our first TV advertising campaign, and we are encouraged by the early results we have seen from this."
Shares in Dunelm were trading up 1.49% at 926.5 pence per share in early trading, one of the biggest gainers on the FTSE 250 Tuesday.
By Alice Attwood; [email protected]; @AliceAtAlliance
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