15th Jul 2020 09:01
(Alliance News) - Dunelm Group PLC on Wednesday said total sales fell by 29% in the fourth quarter of its financial year ended June 27, despite online sales more than doubling.
April sales were down 78% to the year before, May sales were down 48%, but June sales rose 20% in line with the easing of lockdown.
Dunelm shares were up 1.4% early Wednesday in London at 1,162.00 pence and now are up slightly for 2020 so far.
"We have been pleased with the strong customer response since re-opening. Whilst the homewares market has proven to be relatively resilient, we continue to take a cautious view of the short to medium term outlook given the ongoing uncertainty around Covid-19," the company said.
Full year sales were GBP1.06 billion which is a 3.9% reduction on the prior year from GBP1.10 billion.
The homewares retailer expects full-year pretax profit to be between GBP105 million and GBP110 million, down from GBP125.9 million the year before.
Dunelm has underlying net debt of GBP35 million, reflecting that the actual net cash position of GBP45 million includes the benefit of approximately GBP80 million of working capital inflows, including the VAT payment deferral granted by the UK government as one of its Covid-19 responses.
Dunelm said it expects running costs to be higher over the next year due to the cost of implementing social distancing measures. The company expects these costs to be around GBP150,000 per week, about GBP7.8 million per year.
"We expect that technology costs in the 2021 financial year profit and loss will increase by around GBP8 million as we continue to invest in our digital capabilities and no longer capitalise these costs on the balance sheet, as previously announced.
"We will also be investing in supply chain capacity to meet the high growth ambition for our home delivery channels," the group said.
Chief Executive Nick Wilkinson said: "The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business.
"This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers."
By Greg Roxburgh; [email protected]
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